                                In the

     United States Court of Appeals
                  For the Seventh Circuit
No. 12-3330

BONNIE FISH, et al.,
                                                 Plaintiffs-Appellants,

                                   v.


GREATBANC TRUST COMPANY, et al.,
                                                Defendants-Appellees.

          Appeal from the United States District Court for the
            Northern District of Illinois, Eastern Division.
              No. 09 C 1668 — Milton I. Shadur, Judge.


        ARGUED MAY 30, 2013 — DECIDED MAY 14, 2014


   Before SYKES and HAMILTON, Circuit Judges, and
STADTMUELLER, District Judge.*
   HAMILTON, Circuit Judge. The central issue in this appeal is
the application of the statute of limitations for claims for
breach of fiduciary duty under the Employee Retirement



*
  The Honorable J.P. Stadtmueller, United States District Court for the
Eastern District of Wisconsin, sitting by designation.
2                                                              No. 12-3330

Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq.1
The presumptive limitation period for violations is six years
from the date of the last action constituting part of the breach
or violation, but the statute provides a limited exception. The
time is shortened to just three years from the time the plaintiff
gained “actual knowledge of the breach or violation.”
29 U.S.C. § 1113. (The six-year limit can also be extended in
cases of fraud or concealment, but neither is at issue here.)
    The plaintiffs in this case were employees of The Antioch
Company who participated in an employee stock ownership
plan or ESOP. Their claims arise from a buy-out transaction at
the end of 2003 in which Antioch borrowed money to buy all
stock except the stock owned by the employee stock ownership
plan. The buy-out ended badly, leaving Antioch bankrupt and
the employee stock ownership plan worthless. The plaintiffs
have sued under ERISA for breach of fiduciary duties in the
buy-out. The district court granted summary judgment for the
defendants under the three-year limit of § 1113(2), finding that
proxy documents given to plaintiffs at the time of the buy-out
transaction and their knowledge of Antioch’s financial affairs
after the transaction gave them actual knowledge of the alleged
ERISA violations more than three years before suit was filed.
Fish v. GreatBanc Trust Co., 890 F. Supp. 2d 1060 (N.D. Ill. 2012).
    We reverse. The plaintiffs’ claims for breach of fiduciary
duty do not depend solely on the disclosed substantive terms
of the 2003 buy-out transaction. Their claims also depend on

1
 Citations to ERISA in this opinion are to the sections as codified in Title 29
of the United States Code rather than to the sections in the ERISA legislation
as enacted.
No. 12-3330                                                     3

the processes that defendant GreatBanc Trust used to evaluate,
to negotiate, and ultimately to approve the ill-fated transaction.
The plaintiffs’ knowledge of the substantive terms of the buy-
out transaction itself therefore did not give them “actual
knowledge of the breach or violation” alleged in this case. See
Maher v. Strachan Shipping Co., 68 F.3d 951, 956 (5th Cir. 1995).
Summary judgment on the statute of limitations defense must
therefore be reversed.
I. Undisputed Facts for Summary Judgment
   In this appeal from a grant of summary judgment, we
consider the factual record in the light most favorable to the
plaintiffs and give them the benefit of all conflicts in the
evidence and reasonable inferences that may be drawn from
the evidence. See Lesch v. Crown Cork & Seal Co., 282 F.3d 467,
471 (7th Cir. 2002). We do not necessarily vouch for the
objective accuracy of all factual statements here, but defen-
dants moved for summary judgment, which requires that we
view the evidence in this harsh light.
   A. The Parties and the Buy-Out
    Plaintiffs Bonnie Fish, Christopher Mino, Monica Lee
Woosley, and Lynda Hardman were employees of Antioch,
which made and sold scrapbooks and related accessories. They
were also participants in Antioch’s Employee Stock Ownership
Plan (“the Plan”). Before the buy-out transaction closed on
December 16, 2003, the Plan owned 43 percent of Antioch’s
common stock. The remainder was held primarily by members
of the extended Morgan family, which had founded and still
controlled Antioch. The Morgan family decided to pursue a
major transaction that would accomplish several goals:
4                                                   No. 12-3330

(a) allow the Morgan family and other shareholders to cash out
their Antioch stock holdings at a favorable price; (b) leave the
Morgan family in control of the company as fiduciaries of the
Plan; and (c) gain tax advantages by converting Antioch to a
subchapter S corporation with just one shareholder (the Plan).
    We simplify the details of the transaction, but it was
structured so that Antioch would make a tender offer of $850
per share for all shares of its stock. The expectation was that
the Morgan family and all other shareholders would sell all
their stock, but an express condition of the transaction was that
the Plan was required to decline the tender offer so that it
would be left as the sole shareholder. To pay the Morgan
family and the other shareholders the $850 per share, the
relatively small employee-owned company would have to pay
more than $150 million in cash, much of it newly borrowed.
   The Antioch Plan was governed by ERISA. The buy-out
transaction was what ERISA treats as a prohibited transaction
between an employee benefit plan and parties in interest. The
economic substance of the transaction was that the Plan would
buy Antioch stock (indirectly) from the Morgan family and
other shareholders. The individual defendants—Lee Morgan,
Asha Morgan Moran, and Chandra Attiken—were Plan
fiduciaries under ERISA, which prohibits transactions between
plans and persons in interest (including fiduciaries) unless,
among other exceptions, the purchase was for fair market
value determined in good faith by the fiduciary. See 29 U.S.C.
§§ 1106(a), 1108(e). Antioch and the individual defendants
agreed with the other defendant, GreatBanc Trust, to have it
become the Plan trustee on a temporary basis for purposes of
evaluating the proposed tender offer and making an independ-
No. 12-3330                                                   5

ent decision about whether to agree to it (by agreeing not to
tender the Plan’s shares). GreatBanc Trust became the Plan
trustee on August 21, 2003, and remained the trustee until after
the buy-out transaction closed.
   B. The Process Leading to the Buy-Out
    Plaintiffs contend the defendants breached their fiduciary
duties to use a sound process to evaluate the fairness of the
proposed buy-out. GreatBanc Trust’s role was to serve tempo-
rarily as a trustee independent of Antioch and the Morgan
family to evaluate the fairness of the transaction for the Plan
participants. GreatBanc Trust was to negotiate with defendants
on behalf of Plan participants and to keep them informed, and
ultimately to approve or reject the buy-out transaction. The
plan was for the individual defendants to retain control of
Antioch by returning to their fiduciary positions with the Plan
after the buy-out.
    For help in evaluating the transaction, GreatBanc Trust
hired Duff & Phelps, a financial advice firm. In early October
2003, Duff & Phelps described the proposed transaction as “the
most aggressive deal structure in the history of ESOPs.” (That
comment led the Morgans and other Antioch management to
contemplate firing GreatBanc Trust and Duff & Phelps.)
GreatBanc Trust began negotiating amendments to the
proposed transaction.
    In late October, Antioch agreed to GreatBanc Trust’s
request for a so-called Put Protection Price (sometimes called
a PPP) for employees who “cashed out” in the three years
following the transaction. In an ESOP where the stock is not
publicly traded, the plan must provide a “put option” that
6                                                    No. 12-3330

obliges the company to buy back an employee-participant’s
stock when the employee retires, leaves employment, or
otherwise cashes out. See 26 U.S.C. § 409(h). A PPP is a
mechanism to protect ESOP participants against a short-term
drop in stock value, such as in the wake of a highly-leveraged
transaction. The PPP in this deal imposed a floor price for 2004
cash-outs and set a fixed amount to add to the appraised fair
market value of Antioch stock for cash-outs in 2005 and 2006.
The PPP created significant additional liability and risk for
Antioch and the Plan since the company was contractually
obliged to pay the agreed-upon price premium. The PPP was
binding no matter how many employees decided to cash out
and no matter what the appraised fair market value of the
stock might be at the time.
    In November 2003, Antioch also adopted a new Plan
distribution policy that further increased the incentive for Plan
participants to “cash out” with the benefit of the PPP after the
buy-out. A Plan participant who retired early under the old
distribution policy had to wait five years for payments to
begin. (That’s the maximum time allowed by federal tax law.
See 26 U.S.C. § 409(o).) Under the new distribution policy,
payment would begin immediately and the full value would
be paid within five years. This change further increased
Antioch’s potential repurchase liability after the transaction.
    As they had begun their work on the Antioch transaction,
GreatBanc Trust and Duff & Phelps had asked Antioch to
provide repurchase liability projections for twenty-five years
after the proposed transaction. The projections compared
Antioch’s then-current repurchase obligations to the obliga-
tions expected after the buy-out. To fulfill this request, Antioch
No. 12-3330                                                     7

provided GreatBanc Trust with one page from the report that
Antioch’s chief financial officer had prepared to assess its
liability before and after the proposed transaction. The record
does not indicate that GreatBanc Trust or Duff & Phelps ever
reviewed or even requested the full report. Without the full
report, GreatBanc Trust and Duff & Phelps were unable to
verify the key assumptions. They simply took Antioch at its
word, according to plaintiffs. These key assumptions, which
included the projected retirement age of Plan participants,
were made back in July 2003, before the addition of the PPP
and the new distribution policy. In other words, according to
plaintiffs, GreatBanc Trust’s final approval of the buy-out was
based on obsolete and incomplete information.
     Prior to the final version of the PPP agreement and new
distribution policy, Duff & Phelps had provided GreatBanc
Trust with a 22-page report summarizing the proposed
transaction and a 79-page preliminary report reviewing its
impact. These were supplemented in December 2003 by a four-
page update to the original review and a final five-page
fairness letter. These documents give no indication that
GreatBanc Trust or Duff & Phelps considered the potential
negative impact of the PPP or the new distribution policy in
their fairness analysis. This omission lies at the core of plain-
tiffs’ claims. It implicates both GreatBanc Trust’s willingness to
negotiate with Antioch and the defendants, at least as to the
critical price term, and GreatBanc Trust’s consideration of the
long-term interests of the Plan. None of the documents
prepared by Duff & Phelps were provided to plaintiffs at the
time of the transaction.
8                                                   No. 12-3330

    C. The Information Available to Plan Participants
    Because the three-year limitations period under 29 U.S.C.
§ 1113(2) runs from the time the plaintiffs had “actual knowl-
edge of the breach or violation,” this appeal depends in large
part on the information they had about the transaction more
than three years before they filed suit. Antioch sent a proxy
statement regarding the tender offer to all Plan participants
and shareholders in November 2003, a month before the
transaction closed. The proxy statement described the transac-
tion and provided a fairness analysis for non-Plan participants,
who had to act independently to tender their shares. The cover
letter told Plan participants that GreatBanc Trust had been
hired for the sole purpose of ensuring that the transaction was
fair, prudent, and in the best interest of the Plan and its
participants. Defendants’ motion for summary judgment relied
primarily on the disclosures in the proxy materials to show
plaintiffs’ early “actual knowledge” of the alleged breaches.
    The cover letter for the proxy materials said that GreatBanc
Trust had determined that “it is prudent and in the best
interests of the ESOP participants and beneficiaries not to sell
the ESOP’s shares of Antioch’s common stock in the Tender
Offer.” When discussing the purchase price of the shares, the
proxy materials said: “A condition to the Closing is [GreatBanc
Trust’s] receipt of an opinion from Duff & Phelps that the
Transaction, as a whole, is fair to the ESOP from a financial
point of view.” The proxy letter further noted that GreatBanc
Trust “has received a preliminary opinion from Duff & Phelps
to that effect.” These bare-bones references to Duff & Phelps’s
preliminary report were all the information the Plan partici-
No. 12-3330                                                   9

pants received about the fairness analysis conducted on their
behalf.
   The proxy materials also included a one-page section titled
“Risks Related to the Transaction,” which acknowledged some
potential dangers of the highly-leveraged transaction. The
materials addressed in bland terms the risks if the tax benefits
were overestimated or the purchased shares were overvalued.
They also noted that ESOP repurchase obligations could be
higher than expected if the fair market value of stock “in-
creases substantially.” The proxy materials provided reassur-
ance, however: “The Company has projected the potential
repurchase liability through the year 2013 under a set of
assumptions that the Company believes to be reasonable.” The
section concluded, though, that repurchase obligations could
be unexpectedly higher and could leave the company “insol-
vent.”
   No part of the proxy materials provided to the Plan
participants disclosed the processes that GreatBanc Trust and
Duff & Phelps used to exercise due diligence and to conduct
the fairness analysis. Duff & Phelps ultimately provided the
required fairness opinion. GreatBanc Trust approved the
transaction, which closed on December 16, 2003, making the
Plan the sole shareholder of Antioch.
   D. Antioch’s Collapse
   After the closing, things were calm for a few months, but
Plan participants began cashing out in the summer of 2004. In
2004, seventy employees under the age of fifty resigned and
cashed out, taking advantage of the high stock value and the
new distribution policy. According to plaintiffs, the many
10                                                            No. 12-3330

resignations in 2004 depleted Antioch’s remaining cash
reserves, and tax savings could not fully offset declining sales.
According to plaintiffs, these events set off a downward cycle
as liabilities increased and revenues decreased, forcing Antioch
into bankruptcy by 2008. Antioch shares and the Plan were
worthless, representing a total loss of roughly $60 million to
the named plaintiffs and several hundred of their co-workers.
See Fish v. GreatBanc Trust Co., 830 F. Supp. 2d at 429.2
   According to plaintiffs, Antioch collapsed because the buy-
out transaction was far too generous to the Morgan family and
other shareholders, and because the transaction included ill-
advised promises to Plan participants about their ability to
receive comparable stock prices in cash if they retired or left
the company within a few years. Saddled with excessive debt
incurred to pay the Morgan family in the 2003 buy-out,
Antioch was vulnerable to such a “stampede” to cash out.




2
  Antioch’s collapse highlights a risk of employee stock ownership plans,
especially when an ESOP is a major shareholder of a corporation whose
stock is not publicly traded, such as Antioch. Without an efficient market
for the stock, the proper valuation of stock for purposes of paying
employees who retire or leave the company becomes critical for the
company’s financial viability. “If the price is set too low, employees who
leave will feel shortchanged. If it is set too high it may precipitate so many
departures that it endangers the firm’s solvency.” Armstrong v. LaSalle Bank,
N.A., 446 F.3d 728, 730 (7th Cir. 2006). The latter prospect can produce an
accelerating stampede—initially to take advantage of the high price, but
eventually to leave before the company folds under the growing demand
for cash payments.
No. 12-3330                                                    11

II. Analysis
    Defendants GreatBanc Trust Co., Lee Morgan, Asha
Morgan Moran, and Chandra Attiken all owed fiduciary duties
to the Plan and its participants. Plaintiffs allege that GreatBanc
Trust violated its fiduciary duties under ERISA by failing to
take reasonable steps to evaluate the fairness of the Morgan
family’s proposed buy-out before agreeing to the transaction.
Plaintiffs contend that the other defendants failed to monitor
GreatBanc Trust sufficiently, failed to disclose material
information to GreatBanc Trust, and acted under a conflict of
interest where they would benefit from the transaction
regardless of its effect on the employees in the Plan. (We have
simplified the theories considerably; plaintiffs have identified
a number of more specific procedural failings in GreatBanc
Trust’s evaluation of the proposed transaction.)
    The plaintiffs’ claims focus on the fairness analysis per-
formed by GreatBanc Trust and the individual defendants’
actions prior to the 2003 transaction. Plaintiffs contend that all
defendants breached the fiduciary duty of prudence, see
29 U.S.C. § 1104(a)(1)(B), and engaged in a prohibited transac-
tion without adequate consideration, see §§ 1106(a) and
1108(e). The defendants argued, and the district court agreed,
that plaintiffs’ claims are time-barred because they had actual
knowledge of the alleged breaches of fiduciary duty more than
three years before filing suit. We begin by analyzing the
“actual knowledge” standard under § 1113(2) and then turn to
the plaintiffs’ claims and the relevant evidence.
12                                                            No. 12-3330

     A. “Actual Knowledge” Under § 1113(2)
    ERISA provides its own statute of limitations. The generally
applicable rule bars an action brought more than six years after
the end of the fiduciary breach, violation, or omission.
29 U.S.C. § 1113(1). The statute also bars an action if it is
commenced more than “three years after the earliest date on
which the plaintiff had actual knowledge of the breach or
violation.” § 1113(2). The application of the three-year excep-
tion to the six-year default rule turns on the meaning of “actual
knowledge,” which must be distinguished from “constructive”
knowledge or inquiry notice. Martin v. Consultants & Adminis-
trators, Inc., 966 F.2d 1078, 1086 (7th Cir. 1992).
    The different circuit courts of appeals currently apply
different tests for actual knowledge. See generally Wright v.
Heyne, 349 F.3d 321, 327–29 (6th Cir. 2003). The strictest test
applies the three-year bar only when the plaintiff knows not
only the facts underlying the alleged violation but also that
those facts constitute a violation under ERISA. See International
Union v. Murata Erie N. Amer., 980 F.2d 889, 900 (3d Cir. 1992).
A strong textual argument supports this position because the
text phrases the three-year limit in the unusual terms of “actual
knowledge of the breach or violation” rather than merely
knowledge of facts or knowledge of injury. See 29 U.S.C.
§ 1113(2) (emphasis added).3


3
  Most statutes of limitations run from the time a claim accrues, and the
reference to actual knowledge of a violation in § 1113(2) is exceptional. Cf.
Cada v. Baxter Healthcare Corp., 920 F.2d 446, 450 (7th Cir. 1990) (explaining
that limitations period for age discrimination claim starts when claim
                                                                (continued...)
No. 12-3330                                                             13

    Other circuits do not require knowledge that the law was
violated but still demand “actual knowledge of all material
facts necessary to understand that some claim exists, which
facts could include necessary opinions of experts, knowledge
of a transaction’s harmful consequences, or even actual harm.”
Maher v. Strachan Shipping Co., 68 F.3d 951, 954 (5th Cir. 1995)
(also quoting but not adopting the Third Circuit’s decision in
International Union, 980 F.2d at 900, which requires knowledge
of the law) (quotations omitted); see also Caputo v. Pfizer, Inc.,
267 F.3d 181, 193 (2d Cir. 2001).
    We have observed that “it is difficult to say in the abstract
precisely what constitutes ‘actual knowledge.’” Consultants &
Administrators, 966 F.2d at 1086. Our most concise definition is
“knowledge of ‘the essential facts of the transaction or conduct
constituting the violation,’” with the caveat that “it is ‘not
necessary for a potential plaintiff to have knowledge of every
last detail of a transaction, or knowledge of its illegality.’” Rush
v. Martin Petersen Co., 83 F.3d 894, 896 (7th Cir. 1996), quoting
Consultants & Administrators, 966 F.2d at 1086. This court’s
precedent seems consistent with the Fifth Circuit’s approach in
Maher, which requires knowledge of “all material facts” but not
knowledge of every detail or knowledge of illegality. 68 F.3d


3
  (...continued)
accrues, meaning when plaintiff discovers he has been injured); 15 U.S.C.
§ 15b (Sherman Act claims barred “unless commenced within four years
after the cause of action accrued”); 15 U.S.C. § 77m (various limitation
periods under Securities Act of 1933 based on time “after the discovery of
the untrue statement or the omission, or after such discovery should have
been made by the exercise of reasonable diligence,” or “after the violation
upon which it is based”).
14                                                    No. 12-3330

at 954. And a court applying § 1113(2) must take care to resist
the temptation to slide toward reliance upon constructive
knowledge or imputed knowledge, neither of which is actual
knowledge.
     B. Plaintiffs’ Claims for Breach of Fiduciary Duties
    ERISA imposes general standards of loyalty and prudence
that require fiduciaries to act solely in the interest of plan
participants and to exercise their duties with the “care, skill,
prudence, and diligence” of an objectively prudent person.
29 U.S.C. § 1104(a)(1); Eyler v. Comm’r of Internal Revenue,
88 F.3d 445, 454 (7th Cir. 1996). In addition, § 1106 supplements
the general fiduciary duty provisions by prohibiting ERISA
fiduciaries from causing a plan to enter into a variety of
transactions with a “party in interest.” See Keach v. U.S. Trust
Co., 419 F.3d 626, 635 (7th Cir. 2005). As a general rule, a
fiduciary may not engage in a direct or indirect transaction
constituting a “sale or exchange, or leasing, of any property
between the plan and a party in interest.” 29 U.S.C.
§ 1106(a)(1)(A). A plan fiduciary is a party in interest, as are
officers, directors, and major shareholders of a plan sponsor
like Antioch. 29 U.S.C. § 1002(14)(A) & (H). Section 1106
begins, though, by saying “Except as provided in section 1108,”
which provides numerous exceptions to the prohibited
transaction rule. The most relevant exception for this case is for
plan purchases of employer securities. Section 1106(a) does not
apply to such purchases if, among other conditions, the
transaction “is for adequate consideration.” § 1108(e). ERISA
defines adequate consideration as “the fair market value of the
asset as determined in good faith by the trustee … .”
§ 1002(18)(B).
No. 12-3330                                                     15

    Plaintiffs contend that by carrying out the Antioch buy-out
transaction in 2003, all the defendants violated the general duty
of prudence under § 1104 and engaged in a transaction
prohibited by § 1106(a). We have before us not the merits of
those claims but only the statute of limitations defense. To
decide when the plaintiffs gained actual knowledge of the
alleged breaches of fiduciary duty, we must examine the
nature of the alleged breaches. See, e.g., Maher, 68 F.3d at 956.
       1. Substantive and Procedural Elements of Plaintiffs’ Claims
   Whether an ERISA fiduciary has acted prudently requires
consideration of both the substantive reasonableness of the
fiduciary’s actions and the procedures by which the fiduciary
made its decision: “In reviewing the acts of ESOP fiduciaries
under the objective prudent person standard, courts examine
both the process used by the fiduciaries to reach their decision
as well as an evaluation of the merits.” Eyler v. Comm’r, 88 F.3d
at 455. This is true when determining whether an act was
prudent under the general standard of § 1104 and whether an
otherwise prohibited transaction under § 1106 is saved by
“adequate consideration” under § 1108(e). Keach, 419 F.3d at
636.
    In Keach we explained that this combination of substantive
and procedural aspects of the fiduciary’s duties was consistent
with a proposed Department of Labor regulation. Id. at 636 &
n.5. The Department of Labor has identified two requirements
for a transaction to be considered supported by adequate
consideration: a substantive requirement that the value
assigned reflect the fair market value of the asset, and a
procedural requirement that the fiduciary actually determine
16                                                    No. 12-3330

the value assigned in good faith. See Prop. DOL Reg. § 2510.3-
18(b); 53 Fed. Reg. 17,632–33 (May 17, 1988); see also Chao v.
Hall Holding Co., 285 F.3d 415, 437 (6th Cir. 2002) (endorsing
test); Donovan v. Cunningham, 716 F.2d 1455, 1467–68 (5th Cir.
1983) (describing standard before proposed regulation).
    In this case, Duff & Phelps provided GreatBanc Trust with
financial advice about the proposed buy-out. That advice is
highly relevant, of course, but we agree with our colleagues in
the Fifth Circuit: “An independent appraisal is not a magic
wand that fiduciaries may simply wave over a transaction to
ensure that their responsibilities are fulfilled.” Donovan v.
Cunningham, 716 F.2d at 1474. We said in Keach that “an
independent assessment from a financial advisor … is not a
complete defense against a charge of imprudence.” 419 F.3d at
636–37 (internal quotation omitted). Whether the transaction is
exempted under § 1108 by adequate consideration depends in
part on whether GreatBanc Trust performed sufficient due
diligence, including reasonable investigation into Duff &
Phelps’s process and independent scrutiny of materials from
Antioch. When determining whether a fiduciary’s process is
sufficient, “‘the degree to which a fiduciary makes an
independent inquiry is critical.’” Keach, 419 F.3d at 636, quoting
Eyler, 88 F.3d at 456. A fiduciary’s reliance on a financial
advisor is evidence of prudence, but some inquiry into the
advisor’s qualifications and methods is still required. Id. at 637.
   Whether GreatBanc Trust properly approved the buy-out
transaction despite the prohibition in § 1106 depends on
whether its process was sufficient to fulfill the procedural
requirement of adequate consideration. GreatBanc Trust
received Duff & Phelps’s evaluation of the fairness of the
No. 12-3330                                                    17

transaction. While GreatBanc Trust could rely on the fairness
analysis of an expert, it must still demonstrate that its reliance
on the advice from Duff & Phelps for this particular transaction
was justifiable. That means a plaintiff asserting a process-based
claim under § 1104, § 1106(a), or both does not have actual
knowledge of the procedural breach of fiduciary duties unless
and until she has actual knowledge of the procedures used or
not used by the fiduciary.
    The Fifth Circuit has held that to trigger the “actual
knowledge” statute of limitations clock under § 1113(2) for a
process-based claim, the plaintiffs “must have been aware of
the process utilized by [the fiduciary] in order to have had
actual knowledge of the resulting breach of fiduciary duty.”
Maher, 68 F.3d at 956 (reversing summary judgment for
fiduciaries on process-based claim that had been based on
three-year limit). We could not affirm here without creating a
circuit split with Maher, as defendants acknowledged in oral
argument, and we see no good reason to do so. The reasoning
of Maher is sound.
    The Ninth Circuit has made the same point for process-
based claims: the three-year limit cannot be triggered merely
through disclosure of the terms of an imprudent investment
when a claim “hinge[s] on the infirmities in the selection
process.” Tibble v. Edison Int’l, 729 F.3d 1110, 1121 (9th Cir.
2013) (affirming judgment for beneficiaries and rejecting
statute of limitations defense). Thus, for process-based claims
18                                                           No. 12-3330

under §§ 1104 and 1106(a), the three-year limit is not triggered
by knowledge of the transaction terms alone.4
    Our disagreement with the district court centers on this
procedural aspect of plaintiffs’ claims. The district court
rejected plaintiffs’ arguments targeting the process GreatBanc
Trust used to evaluate the transaction: “Their true complaint
is about the substance of the decision, not about the process
undertaken in reaching the decision, for no matter how much
process GreatBanc undertook, plaintiffs would still be
complaining that the ultimate decision that set the redemption
price too high was imprudent.” Fish, 890 F. Supp. 2d at 1067
(emphasis in original). There is no doubt that the harm alleged
by plaintiff was based on the substantive terms of the buy-out,
but knowledge of an unwise decision does not amount to
“actual knowledge” of an imprudent process, which is an
independent breach of fiduciary duty. The district court’s
conclusion overlooked the procedural dimension of a
fiduciary’s duties under ERISA and the ability of a plaintiff to
show she was harmed by a fiduciary’s substantive decision
precisely because the fiduciary violated ERISA by failing to
comply with its procedural obligations.


4
  Even for a substance-based claim, the terms of a transaction alone would
only rarely provide actual knowledge under § 1113(2) since either an expert
opinion or actual harm would likely be necessary before an ESOP partici-
pant could know of the flaws in the substance of a fiduciary’s decision
when only the bare terms were disclosed. See Gluck v. Unisys Corp., 960 F.2d
1168, 1177 (3d Cir. 1992); see also Brown v. Owens Corning Inv. Review
Comm., 622 F.3d 564, 573 (6th Cir. 2010) (charging plaintiffs with actual
knowledge once allegedly imprudent investment “had lost almost all
value”).
No. 12-3330                                                    19

       2. Evidence of Plaintiffs’ Knowledge
    In support of their motion for summary judgment, the
defendants showed that they provided information to the
plaintiffs in November 2003 about the terms of the proposed
buy-out, and they point to the “stampede” of cash-outs that
began Antioch’s slide toward bankruptcy began in 2004, more
than three years before plaintiffs filed suit. This evidence does
not show, however, that the plaintiffs gained knowledge of the
inadequate processes used by GreatBanc Trust to approve the
Antioch buy-out more than three years before they filed this
suit. Without undisputed proof of such knowledge of
inadequate processes, we must reverse summary judgment for
the defendants.
          a. The Proxy Materials
     The evidence here could support a finding that Duff &
Phelps failed to perform an independent assessment because
it simply accepted Antioch’s July 2003 assumptions regarding
the company’s projected repurchase liability. Furthermore,
Duff & Phelps’s work, largely concluded by October, was
performed before the PPP agreement and the new distribution
policy became key elements of the transaction. Plaintiffs have
offered evidence that GreatBanc Trust then committed its own
procedural error by relying unreasonably and uncritically on
Duff & Phelps’s analysis to justify approval of the transaction.
(Recall that we are reviewing a grant of summary judgment
based on the statute of limitations, so we assume for now that
plaintiffs will be able to prove these allegations on the merits.)
   Plaintiffs did not have actual knowledge of the violations
they allege because the evidence does not show they had any
20                                                  No. 12-3330

indication that any of these procedural failures had occurred.
GreatBanc Trust received four reports prepared by Duff &
Phelps, including more than 100 pages of analysis prior to the
mailing of the proxy materials, yet none of these were
provided to the plaintiffs. Instead, the proxy materials said
blandly that some analysis occurred resulting in Duff &
Phelps’s determination the transaction was “fair.” The message
to the plaintiffs, at least implicitly, was that the Plan trustee
had used proper procedures and that the transaction was
therefore not a prohibited transaction under § 1106.
   GreatBanc Trust also provided no explanation of its
decision to rely on the financial advisor’s opinion. Without
considerable insight into both Duff & Phelps’s analysis and
GreatBanc Trust’s reasons for relying upon it, plaintiffs could
not determine whether the buy-out transaction was supported
by adequate consideration as required by §§ 1106(a) and
1108(e) or whether GreatBanc Trust acted prudently under
§ 1104. Plaintiffs knew almost no relevant facts, let alone the
essential facts constituting the violations, see Consultants &
Administrators, 966 F.2d at 1086, and thus could not have had
actual knowledge of these alleged procedure-based breaches.
    Defendants point out that the proxy materials provided
some information about risk, including the risks that ultimately
doomed Antioch. Instead of highlighting the specific
circumstances of the Antioch buy-out, however, the proxy
materials simply provided a short list of the risks inherent in
any highly-leveraged ESOP transaction. And while the
materials explained that Antioch might struggle in the face of
high repurchase obligations, they also did not disclose a major
substantive risk: that an inflated stock valuation might increase
No. 12-3330                                                    21

ESOP redemptions beyond the debt-burdened company’s
ability to pay. See Armstrong v. LaSalle Bank, N.A., 446 F.3d 728,
731–32 (7th Cir. 2006) (explaining a trustee’s duty to avoid a
“run” of ESOP redemptions when a company faces a liquidity
shortage).
    Yet even if the proxy materials had disclosed these
substantive risks more fully, they would not have provided
actual knowledge of the violations alleged in this case.
Plaintiffs challenge not only the substantive prudence of the
buy-out transaction but also the procedures used by GreatBanc
Trust to assess the transaction. Moreover, the proxy materials
did not even mention the PPP and new distribution plan in the
risk disclosure, let alone that they increased the danger that a
“stampede” of cash-outs would occur. Nor did they indicate
whether and how GreatBanc Trust considered the possible
impact on the Plan’s and employees’ long-term interests when
negotiating these amendments. Because the proxy materials
did not describe GreatBanc Trust’s methods, they could not
have given plaintiffs actual knowledge of their claims based on
its alleged failure to use sound processes in deciding whether
to approve the buy-out transaction.
           b. The Stampede Begins
    Defendants also argue that Antioch’s noticeable decline
began during 2004, the first year after the transaction, shown
primarily by the large number of employees who resigned or
retired to cash out, including seventy ESOP participants under
the age of fifty. According to defendants, this unexpectedly
high number of cash-outs provided actual knowledge of
GreatBanc Trust’s alleged imprudence. After all, say
22                                                  No. 12-3330

defendants, those employees perceived the extent of Antioch’s
troubles.
    We reject this argument as a basis for summary judgment.
First, different employees were always likely to weigh
differently the risks and benefits of the choice between quitting
to benefit from the high stock price or staying with the
company. More fundamental, the increase in cash-outs might
have suggested to plaintiffs that “something was awry,” but
again, neither inquiry notice nor constructive knowledge
triggers the three-year limit of § 1113(2). E.g., Consultants &
Administrators, 966 F.2d at 1086.
    Additional evidence indicates that Antioch’s overall
performance in 2004 appeared to be strong based on the
company’s annual report. Defendant Lee Morgan’s
“Chairperson’s Letter” reported that 2004 had been a good
year for the employee-owners, and he noted that the stock
price had increased even after the unexpectedly high number
of ESOP redemptions. Hindsight reveals that the increased rate
of ESOP redemptions in 2004 was the first symptom of
Antioch’s downward spiral after the transaction. But the
limited evidence of the company’s decline then available to
plaintiffs fell far short of providing actual knowledge that
GreatBanc Trust had failed to use prudent processes to weigh
the risks and benefits of the transaction.
    As plaintiff Hardman testified, she was aware of the
increase in redemptions in 2004, but based on the information
she had received, she thought there was “no reason to get
concerned. It was so soon after the transaction that, you know,
I felt that GreatBanc Trust had done their homework and this
No. 12-3330                                                    23

was all taken into consideration.” Her reasoning is consistent
with the District of Columbia Circuit’s reasoning in Fink v.
National Savings and Trust Co., 772 F.2d 951, 957 (D.C. Cir. 1985)
(reversing summary judgment based on three-year statute of
limitations for process-based claims: “beneficiaries are entitled
to assume that in performing these [fiduciary] acts, the
fiduciaries thought about them. If this were not so, the lengthy
list of fiduciary duties under ERISA would mean nothing more
than caveat emptor. A fiduciary’s independent investigation of
the merits of a particular investment is at the heart of the
prudent person standard.”). We cannot fault Ms. Hardman or
any other plaintiff for having faith in the independent trustee
supposedly protecting the Plan participants’ interests.
       3. Defendants’ Additional Arguments
    Defendants offer two additional arguments in support of
summary judgment. First, they contend that plaintiffs received
sufficient information but were “willfully blind” to it. Second,
they contend that because the fiduciary defendants bear the
burden of proving that they acted prudently and used sound
processes to evaluate the transaction, information about the
defendants’ processes was not an element of plaintiffs’ causes
of action, so that their lack of knowledge did not prevent them
from having “actual knowledge” of the alleged breaches. We
reject these arguments.
          a. Willful Blindness
   The district court determined that defendants provided
plaintiffs with sufficient information of the alleged breaches
and that plaintiffs were “willfully blind” to that information
such that they should be charged with actual knowledge. See
24                                                   No. 12-3330

Fish, 890 F. Supp. 2d at 1065. Defendants urge that “willful
blindness” is a basis for affirmance because it is equivalent to
actual knowledge. As explained, plaintiffs did not have access
to materials sufficient to provide actual knowledge of the
alleged process-based ERISA violations. Yet there is a more
fundamental problem with reliance upon willful blindness to
support summary judgment in a civil case.
    As the district court explained, willful blindness is a
concept taken from criminal law and the often-given “ostrich”
instruction. See, e.g., United States v. Garcia, 580 F.3d 528,
536–38 (7th Cir. 2009); United States v. Ramsey, 785 F.2d 184,
190–91 (7th Cir. 1986). Willful blindness is distinct from
constructive knowledge (what a party “should have known”),
negligence, or even reckless disregard for the facts. It implies
a deliberate and conscious decision not to pursue the facts.
   The district court distinguished willful blindness from
carelessness, but the Supreme Court has made clear in a civil
case that the doctrine of willful blindness is considerably
narrower. See Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct.
2060 (2011). The Supreme Court took pains to distinguish
willful blindness from negligence or even reckless or deliberate
indifference toward the facts:
       While the Courts of Appeals articulate the
       doctrine of willful blindness in slightly different
       ways, all appear to agree on two basic
       requirements: (1) the defendant must
       subjectively believe that there is a high
       probability that a fact exists and (2) the
       defendant must take deliberate actions to avoid
No. 12-3330                                                     25

       learning of that fact. We think these requirements
       give willful blindness an appropriately limited scope
       that surpasses recklessness and negligence. Under
       this formulation, a willfully blind defendant is
       one who takes deliberate actions to avoid
       confirming a high probability of wrongdoing
       and who can almost be said to have actually
       known the critical facts. See G. Williams,
       Criminal Law § 57, p. 159 (2d ed. 1961) (“A court
       can properly find wilful blindness only where it
       can almost be said that the defendant actually
       knew”). By contrast, a reckless defendant is one
       who merely knows of a substantial and
       unjustified risk of such wrongdoing, see ALI,
       Model Penal Code § 2.02(2)(c) (1985), and a
       negligent defendant is one who should have
       known of a similar risk but, in fact, did not, see
       § 2.02(2)(d).
131 S. Ct. at 2070–71 (emphasis added; footnote omitted)
(affirming jury finding that defendant was willfully blind to
plaintiff’s patent before beginning infringing conduct).
    If willful blindness has a place in the analysis of the “actual
knowledge” three-year statute of limitations under § 1113(2)—
a question we do not decide here—it would almost certainly
present a genuine issue of material fact to be resolved by the
finder of fact at trial. In criminal cases, the ostrich instruction
on willful blindness describes an inference that a jury may
make, not a rule of law that must be applied even where the
party denies actual knowledge. See, e.g., United States v.
Carrillo, 435 F.3d 767, 780–81 (7th Cir. 2006) (describing issue in
26                                                            No. 12-3330

terms of what a jury may infer); Seventh Circuit Pattern
Criminal Jury Instruction No. 4.10 (2012).5 Consistent with
these observations, we have said that “finding the line between
‘willful blindness’ and ‘reason to know’ may be like finding the
horizon over Lake Michigan in a snowstorm.” Hard Rock Café
Licensing Corp. v. Concession Services, Inc., 955 F.2d 1143, 1151
n.5 (7th Cir. 1992); see also Consultants & Administrators, 966
F.2d at 1086 (“in cases near the border the distinction may well
be nearly semantic”). In other words, only rarely could that
line be drawn as a matter of law.6
    Accordingly, even if we assume willful blindness is
relevant under the actual knowledge standard of § 1113(2), and
even if defendants had made the relevant information
available to the plaintiffs, the willful blindness theory would
not be a sufficient basis for summary judgment here.




5
   We do not address issues here about how Global-Tech Appliances may
apply to the exact wording of criminal jury instructions about knowledge,
as discussed in the committee comments to Pattern Instruction No. 4.10.

6
  Global-Tech Appliances illustrates the point. The plaintiff showed that the
defendant had deliberately copied a foreign model of its product that did
not bear notice of U.S. patents, and then obtained an opinion of non-
infringement from a U.S. lawyer whom it did not tell it had copied
plaintiff’s product. 131 S. Ct. at 2064. The Court found this evidence
sufficient to support a jury finding of willful blindness and thus actual
knowledge, but did not say such a finding was required as a matter of law.
Id. at 2071–72.
No. 12-3330                                                      27

           b. The Burden of Proof for Prohibited Transactions
    Defendants also argue that the burden of proof regarding
whether a fiduciary used appropriate processes and exchanged
property for adequate consideration means that plaintiffs’
claims are time-barred. Under ERISA, the burden of proof is on
a defendant to show that a transaction that is otherwise
prohibited under § 1106 qualifies for an exemption under
§ 1108. See, e.g., Keach, 419 F.3d at 636; accord, e.g., Harris v.
Amgen, Inc., 738 F.3d 1026, 1045 (9th Cir. 2013), petition for cert.
filed on other grounds, (Jan. 10, 2014). We have applied the
same burden of proof to the adequacy of a fiduciary’s
investigation and processes under the more general fiduciary
duty in § 1104. Eyler v. Comm’r, 88 F.3d 445, 455 (7th Cir. 1996),
citing Donovan v. Cunningham, 716 F.2d 1455, 1467–68 (5th Cir.
1983). ERISA plans engage in transactions nominally
prohibited by § 1106 all the time, while also taking steps to
comply with ERISA by relying on one or more of the many
exceptions under § 1108. The burden of proof makes good
sense as a policy matter because the fiduciary will ordinarily
have the information needed to know whether an exception
applies under § 1108.
    Defendants reason that because they have the burden of
proving that they used appropriate processes to determine
fairness and fair market value in the Antioch buy-out, their use
of appropriate processes is an affirmative defense rather than
an element of the plaintiffs’ case. Plaintiffs therefore did not
need knowledge of inadequate processes, defendants argue, to
have “actual knowledge” of the alleged breaches.
28                                                   No. 12-3330

    Defendants’ argument is clever, but it’s not supported by
case authority. It’s also not realistic. First, defendants’ theory
runs directly contrary to the Fifth Circuit’s decision in another
case of process-based fiduciary duty claims, Maher v. Strachan
Shipping Co., 68 F.3d at 956, which they urge us to reject. In
Maher, the defendants had used retirement plan assets to buy
a single premium annuity contract to pay for benefits. The
transaction allowed the defendants to return millions in cash
from the retirement plan to the company, but the company that
sold the annuity later went into conservatorship and
retirement payments were cut substantially. Like the
defendants in this case, the defendants in Maher asserted that
the plaintiffs had actual knowledge of the alleged breach of
fiduciary duty when they learned of the transaction—in Maher
the purchase of the annuity from a shaky seller, and here the
highly leveraged buy-out—and in both cases the district courts
granted summary judgment to the defendants.
    The Fifth Circuit reversed in Maher. The plaintiffs’
knowledge that the seller of the annuity seemed financially
shaky indicated that something might be awry, but that did not
amount to actual knowledge of the breach. Rather, the
plaintiffs were challenging the selection of the seller, and “they
must have been aware of the process utilized by [the employer]
in order to have had actual knowledge of the resulting breach
of fiduciary duty.” 68 F.3d at 956, citing Donovan v.
Cunningham, 716 F.2d at 1467. We agree with that conclusion,
which is also consistent with Waller v. Blue Cross of California,
32 F.3d 1337, 1341 (9th Cir. 1994) (holding that three-year clock
did not begin to run on process-based claims under §§ 1104
and 1106 at time plaintiffs learned of purchase of annuities
No. 12-3330                                                     29

from shaky seller). Whether the transaction here was
prohibited depends on the extent of the fiduciaries’ processes
used to evaluate it. Plaintiffs did not know about the alleged
inadequacy of those processes more than three years before
they filed suit.
    Both sides cite the Eighth Circuit’s decision in Brown v.
American Life Holdings, Inc., 190 F.3d 856 (8th Cir. 1999), on this
issue. The plaintiff in Brown alleged that fiduciaries breached
their duties by investing plan assets too conservatively. The
key passage in the opinion said:
       Therefore, when a fiduciary’s investment
       decision is challenged as a breach of an ERISA
       duty, the nature of the alleged breach is critical
       to the actual knowledge issue. For example, if
       the fiduciary made an illegal investment—in
       ERISA terminology, engaged in a prohibited
       transaction—knowledge of the transaction
       would be actual knowledge of the breach. But if
       the fiduciary made an imprudent investment,
       actual knowledge of the breach would usually
       require some knowledge of how the fiduciary
       selected the investment. See Maher v. Strachan
       Shipping Co., 68 F.3d 951, 955–56 (5th Cir. 1995),
       and cases cited.
190 F.3d at 859 (emphasis in original). The Eighth Circuit
ultimately affirmed summary judgment for the defendants,
concluding that the plaintiff knew of the alleged failure to
diversify investments at the time the transactions were
disclosed to him, and finding that the plaintiff had failed to
30                                                   No. 12-3330

articulate clearly a process-based claim. Id. at 860. We agree
with the broad language in Brown, but it does not answer the
questions before us, which depend on whether the Antioch
buy-out was in fact a prohibited transaction or an imprudent
transaction, both of which depend in turn on the processes
used by the defendants to approve the buy-out.
    We agree with Maher and Waller because their analysis fits
most comfortably within the overall statutory framework of
ERISA as well as the text of § 1113. Under defendants’
unrealistic theory, plaintiffs could have and even should have
filed suit immediately after the 2003 buy-out took place,
without undertaking any investigation of the affirmative
defense that the defendants themselves were invoking at the
time. We doubt it would have been prudent or even
responsible for plaintiffs to have filed suit at the time, knowing
only (a) that the transaction was prohibited under § 1106
unless § 1108 applied, and(b) that defendants claimed it did
apply.
    Consider the situation the plaintiffs faced back in 2003 and
2004. The defendants disclosed to plaintiffs their intention to
go forward with a transaction nominally prohibited under
§ 1106. The disclosures also assured the plaintiffs that the
defendants were taking steps to make sure the transaction was
for adequate consideration and would be approved only after
appropriate procedures had been used to evaluate the fairness
of the transaction and the adequacy of the consideration. In
other words, defendants were telling the plaintiffs that the
transaction was protected under § 1108. That is not providing
actual knowledge of a violation or breach of fiduciary duty.
No. 12-3330                                                   31

    In rejecting defendants’ argument, we are well aware of the
distinction in civil procedure between the elements of a
plaintiff’s claims and an affirmative defense. That distinction
does not extend to the “actual knowledge” standard under
§ 1113 when a defendant invokes an exception under § 1108. In
deciding whether sanctions should be imposed on plaintiffs
who filed unfounded cases, we have said that plaintiffs and
their attorneys “may have a responsibility to examine whether
any obvious affirmative defenses bar the case.” Matter of Excello
Press, Inc., 967 F.2d 1109, 1113 (7th Cir. 1992) (finding that
Federal Rule of Bankruptcy Procedure 9011 (parallel to Federal
Rule of Civil Procedure 11) could impose a duty to investigate
an obvious “ordinary course of business” defense, but
reversing sanctions) (emphasis in original; quotation omitted);
see also Bethesda Lutheran Homes and Services, Inc. v. Born,
238 F.3d 853, 858 (7th Cir. 2001) (reversing denial of sanctions
as abuse of discretion where claim was barred by affirmative
defense of claim preclusion); White v. General Motors Corp.,
908 F.2d 675, 682 (10th Cir. 1990) (affirming sanctions based on
obvious affirmative defense of release); McLaughlin v. Bradlee,
803 F.2d 1197, 1205 (D.C. Cir. 1986) (affirming sanctions where
plaintiff failed to anticipate affirmative defense of issue
preclusion).
   In the case of an ERISA plan that invokes a § 1108 exception
to a § 1106 prohibition, the plaintiff does not have actual
knowledge of an alleged violation until she knows that the
exception does not apply. These plaintiffs did not have actual
knowledge of the violations based on the information
defendants provided. That information claimed that
defendants had been prudent, had used appropriate
32                                                        No. 12-3330

procedures to evaluate the Antioch buy-out transaction, and
had concluded that the consideration would be adequate. To
the extent defendants argue that this approach extends the
limitations period too long, the response is that the six-year
limit in § 1113(1) remains applicable to protect defendants from
stale claims.7
     C. Remaining Issues on Appeal
    Defendants are not entitled to summary judgment based on
§ 1113(2). Because we are reinstating all claims, we address the
remaining issues only briefly. Plaintiffs challenge the dismissal
of later-added plaintiff Evolve Bank, which on January 16, 2008
became the final trustee of the Plan. Using as a launching pad
a footnote by the district judge calling Evolve Bank’s addition
a “manipulative tactic,”see Fish v. GreatBanc Trust Co., 830 F.
Supp. 2d 426, 430 n.7 (N.D. Ill. 2010), the parties have debated
whether plaintiffs’ knowledge should be imputed to Evolve
Bank. The district court stated that “manipulation could be
effected by replacement of knowing fiduciaries with new
fiduciaries without actual knowledge,” id., but it was
defendants’ choice to make Evolve Bank a new fiduciary in this
case. We agree with the Ninth Circuit’s reasoning in
Landwehr v. DuPree, 72 F.3d 726, 732 (9th Cir. 1995), that
knowledge should not be imputed from one party to another
for purposes of the “actual knowledge” standard under
§ 1113(2). Defendants complain that allowing a new fiduciary
to avoid the three-year statute of limitations would undermine

7
  We leave for another day questions that might be raised concerning the
scope of a plaintiff’s duty to investigate under Federal Rule of Civil
Procedure 11 when contemplating a suit based on 29 U.S.C. § 1106.
No. 12-3330                                                    33

the statute, but again, defendants would still be protected by
the six-year limit of § 1113(1).
    Plaintiffs also appeal the district court’s dismissal of their
alternative claim for defendants’ failure to sue themselves for
their own breaches of fiduciary duty. We recognized such a
theory could be viable in Consultants & Administrators, 966 F.2d
at 1089–90. The theory seems in this case to be only a backstop
theory if plaintiffs were to lose under § 1113(2) based on their
own knowledge and the dismissal of Evolve Bank. We are
reversing summary judgment on both of those grounds. The
district court did not explain its reasons for dismissing this
alternative failure-to-sue theory. We vacate that dismissal as
well, and leave it to plaintiffs to decide whether they wish to
continue to pursue the alternative theory on remand. If they do
so, we leave it to the district court to evaluate the theory.
    Plaintiffs also raise a number of objections to the district
court’s unusual procedure in granting the defendants’ second
motion for summary judgment. The district court limited
briefing to just a couple of issues and then proceeded to grant
the motion without further briefing, concluding that plaintiffs
had been given ample opportunities to present all of their
evidence and legal arguments. Because we are reversing on all
claims, we need not address these issues. Plaintiffs will have a
chance to litigate all issues anew upon remand.
    We add that under the circumstances here, plaintiffs should
be permitted to amend their complaint based on the four
intervening years of litigation and the discovery they
undertook after first amending their complaint, see Foman v.
Davis, 371 U.S. 178, 182 (1962) (emphasizing that Rule 15(a)’s
34                                                 No. 12-3330

command that leave to amend “shall be freely given” should
be followed unless apparent interest weighs against
amendment, such as undue delay, bad faith, or futility); Barry
Aviation, Inc. v. Land O’Lakes Municipal Airport, 377 F.3d 682,
689–90 (7th Cir. 2004) (reversing denial of leave to amend), and
discovery should no longer be restricted to statute of
limitations issues.
    Finally, we deny plaintiffs’ separate motion for
reassignment pursuant to Seventh Circuit Rule 36. We are
confident that upon remand the issues will be considered
fairly.
    Because the plaintiffs did not have actual knowledge of the
alleged ERISA violations, defendants’ motion for summary
judgment should have been denied. We REVERSE the
judgment of the district court and REMAND the case for
further proceedings consistent with this opinion.
