                 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.                     ORDER AND
                                          AMENDED
AMGEN, INC.; AMGEN                         OPINION
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
                     Amended May 26, 2015

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

                           Order;
          Concurrence to Order by Judge W. Fletcher;
             Dissent to Order by Judge Kozinski;
                Opinion by Judge W. Fletcher


                           SUMMARY**


                               ERISA

    The panel filed (1) an order amending and replacing its
prior opinion and denying, on behalf of the court, a petition
for rehearing en banc, and (2) an amended opinion.


 *
  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

    In the amended opinion, 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 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 including 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 concluded that there was no contradiction between
defendants’ duty under the federal securities laws and
ERISA.
4                     HARRIS V. AMGEN

     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 in the Amgen Common Stock Fund.
Agreeing with the Sixth Circuit, the panel held that the
defendants’ preparation and distribution of summary plan
descriptions, including their incorporation of Amgen’s SEC
filings by reference, were acts performed in their fiduciary
duty.

    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 the case for further
proceedings consistent with its opinion.

    Concurring in the denial of rehearing en banc, Judge W.
Fletcher wrote that, contrary to the dissent from the denial of
rehearing en banc, the panel’s opinion did not hold that as a
general matter, when previously concealed material
information about a company is eventually revealed, the stock
price will inevitably decline by more than the amount it
would have declined as a result of merely withdrawing the
fund as an investment option. The opinion also did not
impose on fiduciaries an obligation to act when they only
suspect that there has been a violation of the federal securities
laws. Finally, the opinion did not impose on ERISA
fiduciaries greater disclosure obligations than those imposed
under the federal securities laws.
                     HARRIS V. AMGEN                         5

    Dissenting from the denial of rehearing en banc, Judge
Kozinski, joined by Judges O’Scannlain, Callahan, and Bea,
wrote that the opinion failed to give effect to the creation in
Fifth Third of stringent new requirements for plaintiffs who
sue fiduciaries under ERISA for imprudent investment in an
employer’s stock. Judge Kozinski wrote that the opinion
created almost unbounded liability for ERISA fiduciaries and
subjected corporations to novel, judicially-fashioned
disclosure requirements that conflict with those of the
securities laws.


                         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.
6                    HARRIS V. AMGEN

                          ORDER

    The opinion filed on October 30, 2014, and published at
770 F.3d 865, is hereby amended and replaced by the
amended opinion filed concurrently with this order. With
these amendments, Judge W. Fletcher has voted to deny the
petition for rehearing en banc and Judges Farris and Korman
so recommend.

    The full court was advised of the petition for rehearing en
banc. A judge requested a vote on whether to rehear the
matter en banc. The matter failed to receive a majority of the
votes of the nonrecused active judges in favor of en banc
reconsideration. Fed. R. App. P. 35.

    The petition for rehearing en banc is DENIED. No
further petitions for rehearing or rehearing en banc will be
entertained.

    Judge W. Fletcher’s concurrence in the denial of
rehearing en banc and Judge Kozinski’s dissent from the
denial of rehearing en banc are filed concurrently with this
order.
                         HARRIS V. AMGEN                                7

W. FLETCHER, Circuit Judge, concurring in the denial of
rehearing en banc:1

    The panel’s opinion speaks for itself, and I will not repeat
our analysis, much of which is directly responsive to concerns
expressed by the Supreme Court in Fifth Third Bancorp v.
Dudenhoeffer, 134 S. Ct. 2459 (2014).

   I write only to correct three ways in which the dissent
misrepresents what is in our opinion.

                     1. Impact of Withdrawal

    The dissent characterizes our opinion as holding that
withdrawing a fund as an investment option is appropriate
because, “as a general matter, ‘when the previously
concealed material information about [a] company is
eventually revealed . . . the stock price will inevitably decline,
almost certainly by more than the amount it would have
declined as a result of merely withdrawing the [f]und as an
investment option.’” Dissent at 20 (emphasis in original)
(quoting Opinion at 46). Based on that characterization, the
dissent claims that we ignore the Court’s instruction in Fifth
Third to consider whether there will be a net harm to plan
participants resulting from withdrawal of a fund. The dissent
contends that our reasoning is circular because, under the
reasoning it ascribes to us, “withdrawing the fund will always
be the better option, because any stock price decline it may


 1
   Senior Circuit Judge Farris and Senior District Judge Korman were not
eligible to vote on whether the appeal in this case should have been
reheard en banc, and therefore cannot concur in the denial of rehearing en
banc. However, Judge Farris and Judge Korman both agree with what is
written here.
8                   HARRIS V. AMGEN

precipitate will be deemed ‘inevitable.’” Dissent at 20.
(emphasis in original).

    Our opinion contains no such general, all-purpose
holding. We addressed only the situation where “the
previously concealed material information about the company
is eventually revealed as required by the securities laws.”
Opinion at 46 (emphasis added). As we wrote in the opinion:

           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).

Opinion at 37. We therefore assumed, under Federal Rule of
Civil Procedure 8(a) and Ashcroft v. Iqbal, 556 U.S. 662
(2009), that there was material information that had been
                      HARRIS V. AMGEN                         9

withheld in violation of the securities laws. Our analysis is
based on that assumption.

    Withdrawal of the fund as an investment option might
indeed “do more harm than good to the fund,” Fifth Third,
134 S. Ct. at 2473, where the securities laws do not
independently require disclosure. But where the securities
laws do require disclosure of previously withheld material
information, as in this case, the impact of the eventual
disclosure of that information must be taken into account in
assessing the net harm that will result from the withdrawal of
the fund. In such a case, as we wrote in our opinion, it is
plausible to conclude that the withdrawal of the fund will
result in a net benefit, rather than a net harm, to plan
participants.

                2. Knowledge of Fiduciaries

    The dissent contends that we impose on fiduciaries an
obligation to act when they “only . . . suspect” there has been
a violation of the federal securities laws, and that under our
opinion a fiduciary would have an obligation to act whenever
there is “any arguable violation” of those laws. Dissent at 21
(emphasis in original). That is not what we wrote. Our
opinion nowhere requires a fiduciary to act based on mere
suspicion or arguable violation of the federal securities laws.
Under well-established circuit precedent, “[a] violation [of
ERISA’s prudent person standard] may occur where a
company’s stock . . . was artificially inflated during that time
by an illegal scheme about which the fiduciaries knew or
should have known, and then suddenly declined when the
scheme was exposed.” In re Syncor ERISA Litig., 516 F.3d
1095, 1102 (9th Cir. 2008) (emphasis added); see also
29 U.S.C. § 1105(a)(3) (imposing liability on a plan fiduciary
10                   HARRIS V. AMGEN

for another fiduciary’s breach of fiduciary responsibility “if
he has knowledge of a breach by such other fiduciary, unless
he makes reasonable efforts under the circumstances to
remedy the breach”). We wrote repeatedly and consistently
that a fiduciary’s obligation to act is triggered only when he
or she “knew or should have known” of a violation of the
securities laws.

     For example, we wrote that the fiduciaries in this case
were obliged to act only when they “knew or should have
known that material information was being withheld from the
public.” Opinion at 46 (emphasis added). We concluded that
the plaintiffs in this case had shown that it was “plausible,”
under Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), that at
least some fiduciaries “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.” Opinion at 44
(emphasis added). And we held that, on remand, the
defendants were entitled to argue “that their liability, or the
extent of their liability, should depend upon the extent to
which they knew, or should have known, that material
information was being withheld from the public in violation
of the federal securities laws.” Opinion at 49 (emphasis
added). See also id. at 39, 41, 54, 55, 56.

          3. Disclosure Obligations Under ERISA

   Finally, the dissent contends that our opinion imposes on
ERISA fiduciaries greater disclosure obligations than those
imposed under the federal securities laws. It writes:

          The panel also disregards the Court’s
       second key instruction, that we carefully
             HARRIS V. AMGEN                      11

consider how ERISA-based obligations may
conflict with disclosure requirements under
the securities laws. The panel reasons that
such a conflict simply can’t occur because “if
defendants had revealed material information
in a timely fashion to the general public . . .
they would have simultaneously satisfied their
duties under both the securities laws and
ERISA.” But the panel fails to appreciate the
Court’s concerns in Fifth Third. The Court
was not only concerned that fiduciaries would
be forced to violate the securities laws to
comply with ERISA, it was also worried that
“ERISA-based obligations” would be broader
than the disclosure requirements under the
securities law and would therefore interfere
with the compromise Congress struck when
enacting those laws.

     The securities laws do not require
continuous disclosure of all information that
may bear on a stock price. Congress . . .
enacted a comprehensive and tessellated
statutory scheme for corporate disclosure that
imposes obligations on certain corporate
officers to reveal information at specific
times. See, e.g., 15 U.S.C. §§ 78m, 78o(d).
There is no allegation that 17 of the 19
defendants here violated the securities laws,
or that they even had disclosure obligations
under those laws. Yet under the panel’s
holding, they are liable under ERISA for
failing to do precisely what the securities law
do not require of them: immediately disclose
12                   HARRIS V. AMGEN

        inside information at the moment they
        “should have known” it was material.

Dissent at 22–23 (emphases in original).

    The dissent is mistaken. We nowhere wrote that ERISA
fiduciaries, including defendants in this case, have broader
disclosure obligations than those imposed under the federal
securities law. In response to Fifth Third (and to arguments
made by defendants before Fifth Third was decided), we
carefully considered whether “ERISA-based obligations may
conflict with disclosure obligations under the securities
laws.” We also carefully restricted our description of
defendants’ disclosure duties under ERISA to those
disclosure obligations that complied with, but did not exceed,
obligations under the securities laws. We agree with the
dissent that “the securities laws do not require continuous
disclosure of all information that may bear on a stock price,”
and we nowhere wrote that ERISA requires any such
“continuous disclosure.”

     We wrote:

        Compliance with ERISA would not have
        required defendants to violate [federal
        securities] laws; indeed, we interpret ERISA
        to require first and foremost that defendants
        not violate those laws. That is, 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
                     HARRIS V. AMGEN                       13

       under both the securities laws and ERISA. . . .
       Alternatively, if defendants had made no
       disclosures but had simply not allowed
       additional investments in the Fund with 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.

Opinion at 48–49 (emphasis in original).

    In response to defendants’ argument 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,” we wrote that defendants’ “fiduciary
duties of loyalty and care to plan participants under ERISA,
with respect to company stock, are [not] less than the duty
they owe to the general public under the securities laws.” Id.
at 51 (emphasis added). But we never wrote, or even
suggested, that defendants owe a greater disclosure duty than
that imposed under the securities laws. We summarized,
“[T]here is no contradiction between defendants’ duty under
the federal securities laws and ERISA. Indeed, properly
understood, these laws are complementary and reinforcing.”
Id.
14                    HARRIS V. AMGEN

Judge KOZINSKI, with whom Judges O’SCANNLAIN,
CALLAHAN and BEA join, dissenting from the denial of
rehearing en banc:

    The Supreme Court has previously admonished us for
ignoring a grant, vacate and remand (GVR) order and
“reinstating [our] judgment without seriously confronting the
significance of the cases called to [our] attention.” Cavazos
v. Smith, 132 S. Ct. 2, 7 (2011). We’re at it again. In Fifth
Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459 (2014), the
Supreme Court created stringent new requirements for
plaintiffs who sue fiduciaries under ERISA for imprudent
investment in an employer’s stock. Here, in response to a
GVR, the panel not only fails to give effect to those
requirements, but also insulates our circuit law from
important aspects of the Supreme Court’s holding.

    The panel’s decision creates almost unbounded liability
for ERISA fiduciaries, plainly at odds with what the Court
instructed. Worse still, the panel’s rule will have grave
consequences for corporations across America, leaving them
acutely vulnerable to meritless lawsuits and subjecting them
to novel, judicially-fashioned disclosure requirements that
conflict with those of the securities laws. I sincerely regret
that a majority of our court did not see fit to take this case en
banc. I expect the Supreme Court will promptly correct our
error.

    1. Congress has long viewed employee ownership of
employer stock as “a goal in and of itself.” Moench v.
Robertson, 62 F.3d 553, 568 (3d Cir. 1995). To further this
goal, Congress has given companies numerous incentives to
create retirement plans that permit investment in their own
stock. Under such plans, employees choose the proportion of
                     HARRIS V. AMGEN                        15

their retirement savings to be placed in a “fund” consisting
entirely of company stock, and the proportion to be placed
into other funds that contain a more diversified portfolio.
Corporate officers typically administer these plans and serve
as fiduciaries with certain obligations under ERISA.
However, plan fiduciaries typically don’t have discretion to
decide how an employee’s savings are to be apportioned
between the funds in a plan. So, for example, when an
employee says he wants 25% of his monthly retirement
savings placed in the employer-stock fund, 25% of those
savings are invested in employer stock. The fiduciary is
effectively an intermediary: He must take the savings the
employee apportions to the employer fund and buy the
company’s stock with it.

    So far, so good. The trouble occurs when a fiduciary has
reason to believe that employer stock might be overvalued.
Though a fiduciary can’t elect to diversify employee savings
of his own accord, he can remove company stock as an
investment option by withdrawing the fund, thereby
preventing employees from continuing to invest in what he
suspects might be overpriced shares. But removing company
stock as an investment option is a radical step. It may violate
the terms of a plan’s written instruments, it can send a signal
to the market that something is seriously wrong with the
company and it certainly undermines employees’ investment
autonomy. Therefore, whenever a fiduciary fears an
employer’s stock is overvalued, he is, in the Supreme Court’s
words, “between a rock and a hard place: If he keeps
investing and the stock goes down he may be sued for acting
imprudently . . . but if he stops investing and the stock goes
up he may be sued for disobeying the plan documents” or
otherwise harming the fund. Fifth Third, 134 S. Ct. at 2470.
16                    HARRIS V. AMGEN

    Recognizing the uniquely vulnerable position of ERISA
fiduciaries, many courts, including ours, had previously held
that a fiduciary’s investment in employer stock should be
given a “presumption of prudence.” See, e.g., Quan v.
Computer Scis. Corp., 623 F.3d 870, 881 (9th Cir. 2010).
Under this presumption, a fiduciary was liable only if he
continued to invest in employer stock when the company was
facing collapse or catastrophic decline. In Fifth Third, the
Supreme Court considered whether fiduciaries are owed such
a presumption. The plaintiffs there argued that, far from
being presumed prudent, fiduciaries should be liable
whenever they possessed inside information suggesting
company stock was overvalued, and failed to either publicly
disclose that information or remove the stock as an
investment option. Id. at 2464.

    The Court’s decision in Fifth Third was a compromise.
While the Court rejected the presumption of prudence as
inconsistent with ERISA’s text, it recognized that, without
such a presumption, fiduciaries were at acute risk of liability.
The Court therefore stressed the special importance of the
motion to dismiss to “weed out meritless lawsuits.” Id. at
2470. To facilitate a rigorous 12(b)(6) inquiry, the Court
crafted new and daunting liability requirements that plaintiffs
must plausibly allege are met in order to state a claim. Two
of them are relevant to this case. First, the Court held that
there is no liability if any “prudent fiduciary in the
defendant’s position could [] have concluded that stopping
purchases . . . 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 by the fund.” Id. at 2473. Second, the
Court stated that lower courts should carefully “consider the
extent to which an ERISA-based obligation either to refrain
                      HARRIS V. AMGEN                        17

on the basis of inside information from making a planned
trade or to disclose inside information to the public could
conflict with the complex insider trading and corporate
disclosure requirements imposed by the federal securities
laws or with the objectives of those laws.” Id.

    2. Plaintiffs’ underlying legal theory in this case is
functionally identical to that in Fifth Third. Plaintiffs allege
that Amgen, a large pharmaceutical company, concealed the
negative results of a clinical trial for an anemia drug and also
marketed a risky off-label use for that drug. After the results
of the trial came to light and the off-label use of the drug was
restricted by the FDA, Amgen’s stock dropped by
approximately 30%. Plaintiffs claim that fiduciaries of
Amgen’s stock-ownership plans knew or should have known
that the stock was overvalued based on inside information,
and should have either removed the Amgen stock as an
investment option or revealed to the general public the test
results and the alleged riskiness of the off-label use.

    The panel initially decided this case before Fifth Third
and reversed the district court’s dismissal. Harris v. Amgen,
Inc., 738 F.3d 1026 (9th Cir. 2013). Amgen supplemented its
petition for certiorari after Fifth Third was decided,
specifically pointing out the panel’s inconsistency with the
two requirements discussed above. The Court vacated the
panel’s decision and remanded for reconsideration in light of
Fifth Third, obviously expecting the panel would impose the
two new liability requirements relevant to this case.

    Unsurprisingly, given that it was filed before Fifth Third
was decided, the existing complaint fails to adequately plead
those two requirements. A complaint may survive a motion
to dismiss only “when the plaintiff pleads factual content that
18                    HARRIS V. AMGEN

allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007)). The Supreme Court
held in Fifth Third that a defendant is only “liable for the
misconduct alleged” if no reasonable fiduciary in his position
could conclude that withdrawing the fund or disclosing inside
information would do more harm than good to the fund.
When, as here, the Supreme Court changes—or more
precisely defines—what constitutes “misconduct,” it
inescapably follows that the “factual content” that must be
pled also changes. Yet, the panel holds the complaint here
survives simply because it recites the conclusion that
fiduciaries could have withdrawn the fund or disclosed inside
information. Nowhere does the complaint even allege that
defendants could have done so without doing more harm than
good to the fund, let alone plead sufficient facts to make such
an allegation plausible. Nor do plaintiffs allege that
defendants could have disclosed inside information without
conflicting with the securities laws—Fifth Third’s other novel
liability requirement.

    Sure, the complaint is long and contains plenty of
background information regarding the alleged inflation of
Amgen stock. But a complaint’s sufficiency no longer
depends merely on its length or level of detail. In the
Twiqbal era, plaintiffs must state facts that “plausibly suggest
an entitlement to relief.” Iqbal, 556 U.S. at 681. A complaint
that fails to state sufficient facts to plausibly suggest how
Fifth Third’s new requirements have been met must be
dismissed, no matter how extensive its other allegations
may be.
                      HARRIS V. AMGEN                        19

    After all, how can meritless ERISA fiduciary suits be
“weeded out” at the motion to dismiss stage, if a complaint
can survive through no more than an unadorned conclusion
that fiduciaries could have withdrawn the fund or disclosed
information? Any complaint filed by minimally competent
counsel will surely do that. By “unlock[ing] the doors of
discovery for [those] armed with nothing more than
conclusions,” Iqbal, 556 U.S. at 678–79, the panel’s holding
not only conflicts with Fifth Third’s special emphasis on Rule
12(b)(6), it fundamentally undermines Iqbal and Twombly in
our circuit. Future litigants in our court will now be able to
inflict massive discovery costs on defendants by reciting
liability requirements, without furnishing any of the facts
necessary for us to plausibly infer that those requirements
have been met.

    3. It’s not just the panel’s failure to remand that’s
suspect, it’s the reasoning it employs to get there. Quite aside
from its ramifications for pleading standards, the panel’s
reasoning renders meaningless crucial language in Fifth
Third, in open disregard for the intent behind the Supreme
Court’s GVR order.

    Let’s start with the Court’s requirement that liability will
attach only if no “prudent fiduciary” could “conclude[] that
stopping purchases . . . or publicly disclosing negative
information would do more harm than good to the fund.” The
panel first asserts that, “given the relatively small number of
Amgen shares that would not be purchased by the Fund in
comparison to the enormous number of actively traded
shares, it is unlikely that the decrease in the number of shares
that would otherwise have been purchased, considered alone,
would have an appreciable negative impact on the share
price.” How does the panel know that, you ask? I’m not
20                    HARRIS V. AMGEN

sure—it’s not an allegation that was pled in the complaint.
So, the panel’s view can only be based on some extra-record
speculation, the sort of thing we are neither permitted nor
equipped to engage in.

    What the complaint does allege is that, “If Company
Stock were eliminated as an investment option under the
Plan, [it] would have sent a negative signal to Wall Street
analysts, which in turn would result in reduced demand for
Amgen Stock and a drop in the stock price.” First Amended
Complaint ¶ 330. As the complaint appears to acknowledge,
withdrawal of the fund as an investment option is the worst
type of disclosure: It signals that something may be deeply
wrong inside a company but doesn’t provide the market with
information to gauge the stock’s true value. Of course, there
may be exceptional circumstances where such extreme action
is compelled by ERISA, and Fifth Third calls for a careful
parsing of the particular allegations in a complaint to decide
when that is so. But, instead of engaging in that fact-sensitive
inquiry, the panel holds that withdrawing the fund was
appropriate because, as a general matter, “when the
previously concealed material information about [a] company
is eventually revealed . . . the stock price will inevitably
decline, almost certainly by more than the amount it would
have declined as a result of merely withdrawing the [f]und as
an investment option.”

    Under that theory, withdrawing the fund will always be
the better option, because any stock price decline it may
precipitate will be deemed “inevitable.” But, for Fifth
Third’s requirement to mean anything at all, the Supreme
Court must have contemplated situations where a fiduciary
could permissibly balance the long and short run effects of
withdrawal on the share price, or account for the fact that a
                     HARRIS V. AMGEN                        21

badly timed withdrawal could cause the stock value to drop
below its efficient-market level. The panel’s holding washes
those possibilities away. It blesses a complaint that does
nothing more than allege the hypothetical capability of
withdrawing the fund, without requiring a single allegation
regarding the probable effects of that withdrawal. In our
circuit, a fiduciary now can never be safe from a lawsuit if he
fails to withdraw the fund based on the reasonable belief that
it will “do more harm than good to the fund by causing a drop
in the stock price.” Fifth Third, 134 S. Ct. at 2473. The
panel’s reasoning renders that crucial language in Fifth Third
utterly without meaning.

    That holding implicates a far broader range of situations
than just those in which an actual securities violation has
occurred. Remember, at the time of acting, a fiduciary won’t
know whether there was a securities violation; he’ll only have
reason to suspect there was one. Under conditions of
uncertainty, the only way a fiduciary can avoid the risk of
liability is by disclosing any arguable violation. For
example, a fiduciary might believe that a company’s financial
performance is being overstated by senior officials. Or he
might believe that a piece of information needs to be
disclosed immediately under the securities laws, when senior
officials think only periodic disclosure is required. Such
differences of opinion are a common occurrence in most
corporations. A fiduciary—often a mid-level administrator
with no independent legal counsel and limited information
about the company’s overall situation—may well be
egregiously wrong in his assessment. Yet, under the panel’s
holding, he risks liability every time he fails to act on his
impulses, even when any proposed course of action would
have disastrous consequences for the share price. And, don’t
forget, such share-price drops—when they inevitably result—
22                   HARRIS V. AMGEN

will punish all those employees who had previously chosen
to invest in the company.

     The panel also disregards the Court’s second key
instruction, that we carefully consider how ERISA-based
obligations may conflict with disclosure requirements under
the securities laws. The panel reasons that such a conflict
simply can’t occur because “if defendants had revealed
material information in a timely fashion to the general public
. . . they would have simultaneously satisfied their duties
under both the securities laws and ERISA.” But the panel
fails to appreciate the Court’s concerns in Fifth Third. The
Court was not only concerned that fiduciaries would be
forced to violate the securities laws to comply with ERISA,
it was also worried that “ERISA-based obligations” would be
broader than the disclosure requirements under the securities
laws and would therefore interfere with the compromise
Congress struck when enacting those laws. Fifth Third,
134 S. Ct. at 2473.

    The securities laws do not require continuous disclosure
of all information that may bear on a stock price. Congress
specifically rejected that route because of the enormous
transaction costs and inefficiencies such disclosures would
create. Instead, it enacted a comprehensive and tessellated
statutory scheme for corporate disclosure that imposes
obligations on certain corporate officers to reveal information
at specific times. See, e.g., 15 U.S.C. §§ 78m, 78o(d). There
is no allegation that 17 of the 19 defendants here violated the
securities laws, or that they even had disclosure obligations
under those laws. Yet, under the panel’s holding, they are
liable under ERISA for failing to do precisely what the
securities laws do not require of them: immediately disclose
inside information at the moment they “should have known”
                      HARRIS V. AMGEN                         23

it was material. The panel has a duty, following Fifth Third,
to assess whether compelling such disclosures might conflict
with the securities laws. Instead, the panel acts as if the
Supreme Court hadn’t spoken.

    4. It makes matters worse that the panel’s adventurism
occurs in a matter of exceptional importance that drastically
impacts thousands of companies and millions of employees
who participate in stock-ownership plans. Every company
that offers such a plan now faces the chaotic prospect of its
plan fiduciaries releasing a disparate array of half-truths and
incomplete data to the market; or worse, the incessant
withdrawal and reinstatement of its fund as fiduciaries are
forced to act upon every tidbit of inside information they fear
might make them the target of a lawsuit. What conceivable
benefit flows from having a company’s “VP of human
resources” publicly explain that he disagrees with a CEO’s
financial projection? What virtue is there in triggering a
stock price collapse by withdrawing the fund, simply because
the “director of benefits” is worried that an erroneous
statement was made? I understand the impulse to deter
securities fraud. But it’s hardly rational to require every blind
man to report on the shape of the whole elephant.

    Let’s also not forget that many ERISA fiduciary suits are
as bad for employees as they are for companies. Settling
meritless lawsuits is a costly endeavor and the money will no
doubt come out of workers’ pockets sooner or later, whether
that be through diminished salaries, layoffs or reductions in
employer benefit contributions.

   And a proliferation of ERISA fiduciary suits will surely
have the long-term effect of forcing companies to
permanently withdraw company stock as an investment
24                    HARRIS V. AMGEN

option, even though the presence of such an option has been
shown to enhance employee satisfaction, reduce the
propensity for layoffs and increase an employer’s likelihood
to directly contribute to its employees’ retirement benefits.
Even if none of that were so, Congress has made the
considered policy judgment to encourage the creation of
employee stock-ownership plans and has specifically
instructed courts to refrain from “regulations and rulings
[that] block the establishment and success of [such] plans.”
See Tax Reform Act of 1976, Pub. L. No. 94–455, § 803(h),
90 Stat. 1590 (1976). Leaving aside the litany of practical
problems the panel opinion creates, its promiscuous liability
standard flies in the face of Congress’s unmistakable will.

                *              *               *

    As an intermediate court, our role is to faithfully apply the
law as announced by the Supreme Court. The Court in Fifth
Third plainly intended to offer fiduciaries robust protection
against litigation at the motion to dismiss stage. The Court
devoted multiple pages of its opinion to liability requirements
that are genuinely novel. The Court then granted a petition
for certiorari that specifically directed us to re-examine our
prior holding in light of those new liability requirements.
Eschewing the simple and expedient solution of a remand, the
panel substituted its own judgment for that of the Supreme
Court. That decision evinces an impermissible disregard for
controlling authority and will have dire consequences for
corporations and employees alike. It’s a decision we will
come to regret.
                     HARRIS V. AMGEN                      25

                        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.
26                   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                        27

                       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,
28                   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                       29

    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
30                   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                        31

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
32                   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                      33

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
34                   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                       35

       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
36                    HARRIS V. AMGEN

physician incentives pending further FDA action. On May 8,
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.,
                      HARRIS V. AMGEN                        37

573 F.3d 728, 731 (9th Cir. 2009). The court dismissed
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).
38                   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                          39

     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).
40                    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                        41

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 about 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
42                   HARRIS V. AMGEN

prudent man 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 made 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
                     HARRIS V. AMGEN                        43

prudence is one of conduct, not results”); Bunch v. W.R.
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, 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 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.”
44                   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                          45

        [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.

    Defendants’ argument does not take into account the fact
that, quite independently of any obligation under ERISA, the
federal securities laws require disclosure of material
information. Consider, first, a situation in which the Fund is
not removed as an investment option until after the material
information has been concealed from the public for a
substantial period of time, and the stock price has been
substantially inflated as a result. In this situation, the adverse
consequences of the removal of the Fund would be no greater
than, and probably substantially less than, the consequences
of the disclosure required by the securities laws. This is so
for several reasons. First, removing the Fund as an
investment option would not mean liquidation of the Fund.
It would mean only that while the share price is artificially
inflated, plan participants would not be allowed to invest
additional money in the Fund, and that the Fund would
therefore not purchase additional shares at the inflated price.
Second, given the relatively small number of Amgen shares
that would not be purchased by the Fund in comparison to the
46                    HARRIS V. AMGEN

enormous number of actively traded shares, it is unlikely that
the decrease in the number of shares that would otherwise
have been purchased, considered alone, would have an
appreciable negative impact on the share price. Finally, if the
investing public were to take the removal of the Fund as a
negative signal about the value of Amgen stock, any
reduction in the stock price would anticipate (and only
partially) the inevitable result of Amgen’s eventual
compliance with the federal securities laws. That is, when the
previously concealed material information about the company
is eventually revealed as required by the securities laws, the
stock price will inevitably decline, almost certainly by more
than the amount it would have declined as a result of merely
withdrawing the Fund as an investment option. It is thus
quite plausible, in this situation, that defendants could remove
the Fund from the list of investment options without causing
undue harm to plan participants.

     Next, consider a situation in which the Fund is removed
as an investment option as soon as the fiduciaries —
including fiduciaries without disclosure obligations under the
federal securities laws — knew or should have known that
material information was being withheld from the public. If
the fiduciaries with inside knowledge but without disclosure
obligations act to remove the Fund as an investment option as
soon as Amgen’s share price begins to be artificially inflated
— that is, as soon as those fiduciaries with disclosure
obligations begin to violate the securities laws — that action
may cause those fiduciaries to comply with their obligations
under the securities laws. In that event, there will be no
artificial increase in the share price, and no corresponding
decline at a later time. Even if removal of the Fund as an
investment opinion does not cause those defendants with
disclosure obligations to comply with the securities laws, its
                      HARRIS V. AMGEN                        47

removal will at least protect plan participants from investing
in Amgen stock as artificially inflated prices. Removal of the
Fund as an investment option might cause a drop in the share
price, perhaps slightly more than the amount of any initial
artificial inflation. This very drop in stock price might cause
the insider fiduciaries with disclosure obligations to comply
with the securities laws. But even if the drop in stock price
does not cause these fiduciaries to comply, removal of the
Fund as an investment option will prevent the greater harm to
plan participants that would result if no disclosure is made, if
the stock price continues to inflate artificially, and if plan
participants are allowed to make continued investments in the
Fund at increasingly inflated prices. In other words, it is
quite plausible that in this situation, too, defendants could
remove the Fund as an investment option without causing
undue harm to plan participants.

    We emphasize that any problem created by allowing plan
participants to invest in the Fund as it purchased Amgen stock
at artificially inflated prices is a problem of the defendants’
own making. Both the insider fiduciaries without disclosure
obligations under the federal securities laws and those with
such obligations have it within their power to prevent harmful
investments by plan participants. Insider fiduciaries without
disclosure obligations should act to protect plan participants
as soon as they know or should know that information of the
kind for which disclosure is required under the securities laws
is not being released to the public. Insider fiduciaries with
disclosure obligations should act to protect plan participants
under ERISA as soon as the federal securities laws require
disclosure. The fact that the fiduciaries decide not to act at
this early stage does not mean that their ERISA fiduciary
duties do not apply thereafter. Quite the opposite. It means
48                    HARRIS V. AMGEN

that they are continuing to violate their fiduciary duties by not
acting.

    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, we
interpret ERISA to require first and foremost that defendants
not violate those laws. That is, 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
                      HARRIS V. AMGEN                        49

trading, for there is no violation absent purchase or sale of
stock.

     We note that the foregoing analysis presumes that at least
some defendants were subject both to ERISA’s duty of
prudence and to the requirements of the securities laws. On
remand from the Supreme Court, defendants assert for the
first time that this is not so for all of the defendants. But no
defendant made an argument in the district court based on this
ground, and nothing in our opinion forecloses a defendant
from making such an argument on remand from this court.
That is, nothing in our opinion prevents defendants from
arguing on remand from this court that their liability, or the
extent of their liability, should depend upon the extent to
which they knew, or should have known, that material
information was being withheld from the public in violation
of the federal securities laws, and the extent that they had, or
did not have, an obligation under the those laws to reveal
such information to the public.

    Finally, defendants argue 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).
50                    HARRIS V. AMGEN

       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
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 had assumed that to
be so, and had 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.
                      HARRIS V. AMGEN                         51

                          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.

    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
52                   HARRIS V. AMGEN

       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
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.”
                      HARRIS V. AMGEN                         53

        [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.
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
54                   HARRIS V. AMGEN

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
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
                      HARRIS V. AMGEN                        55

       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
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
56                    HARRIS V. AMGEN

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).

                         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,
                      HARRIS V. AMGEN                        57

        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).

     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
58                   HARRIS V. AMGEN

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
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,
                      HARRIS V. AMGEN                        59

       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).

    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)).
60                    HARRIS V. AMGEN

    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
       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
                     HARRIS V. AMGEN                        61

       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
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).
62                    HARRIS V. AMGEN

    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.

    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
                      HARRIS V. AMGEN                          63

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
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.
