LYNN MARTIN, * Secretary of the United States Department of Labor, Plaintiff-Appellant/Cross-Appellee, v. CONSULTANTS & ADMINISTRATORS, INCORPORATED, JAMES F. NORTON, PAUL A. DIFRANCO, et al., Defendants-Appellees, and WALTER HARDY, JOSEPH J. SPINGOLA, L.E. GIANETTI, et al., Defendants-Appellees/Cross-Appellants. LYNN MARTIN, Secretary of the United States Department of Labor, HENRY ARGENTA, JOSEPH DEROSE, et al., Plaintiffs-Appellees, v. CONSULTANTS & ADMINISTRATORS, INCORPORATED, JAMES F. NORTON and PAUL A. FOSCO, Defendants-Appellants.

* Lynn Martin is substituted for Elizabeth Dole in these appeals pursuant to Federal Rule of Appellate Procedure 43(c).
Nos. 90-2450 & 90-2568, No. 90-3113
UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT
966 F.2d 1078; 1992 U.S. App. LEXIS 13944; 15 Employee Benefits Cas. (BNA) 1601
 
May 31, 1991, Argued  
June 18, 1992, Decided
SUBSEQUENT HISTORY: Petition for Rehearing and Suggestion for Rehearing en banc Denied September 16, 1992, Reported at 1992 U.S. App. LEXIS 22070.

PRIOR HISTORY:  [**1]  Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 87 C 4059 & 87 C 4890--George M. Marovich, Judge.

DISPOSITION: AFFIRMED in part, REVERSED in part and REMANDED.

 CASE SUMMARY
 

PROCEDURAL POSTURE: Plaintiff cabinet secretary, defendant corrupt and innocent health fund trustees, and defendant dental services corporation all appealed various aspects of the judgment of the United States District Court for the Northern District of Illinois, Eastern Division, holding that certain claims were barred by the statute of limitations while others were not.

 

OVERVIEW: Plaintiff cabinet secretary, defendant corrupt and innocent health fund trustees, and defendant dental services corporation each appealed various aspects of a district judge's summary judgment ruling in a lawsuit revolving around the payment of kickbacks to defendant corporation. The court affirmed in part, reversed in part, and remanded. Plaintiff sued defendant corrupt trustees and defendant corporation to recover kickbacks paid. Plaintiff also sued defendant innocent trustees on grounds of negligent supervision of defendant corporation. Defendant innocent trustees, in turn, sued defendant corporation to recover the kickbacks. On appeal, the court affirmed the dismissal of plaintiff's claims against defendant innocent trustees as untimely, and affirmed the ruling that plaintiff's lawsuit against defendant corporation could go forward. It reversed the ruling dismissing the lawsuit against defendant corrupt trustees' improper kickback payment, however, and the ruling that defendant innocent trustees' claim could proceed.

 

OUTCOME: The judgment dismissing plaintiff's claim against defendant innocent trustees and permitting plaintiff's lawsuit against defendant corporation to go forward. It reversed the rulings dismissing the claim against defendant corrupt trustees and permitting defendant innocent trustees' claims to proceed.

CORE TERMS: kickback, statute of limitations, concealment, fraudulent concealment, six-year, bidding, laches, monitoring, actual knowledge, diligence, limitations period, grand jury, discovery, three-year, self-concealing, bid, summary judgment, tolling, grand jury investigation, discover, indictment, fiduciary, active concealment, equitable tolling, confidential, estoppel, notice, closed-panel, trigger, duty
LexisNexis(R) Headnotes  Hide Headnotes
Civil Procedure > Appeals > Appellate Jurisdiction > Interlocutory Orders 
 

HN1

The three prerequisites for an appealable judgment under Fed. R. Civ. P. 54(b) are, first, the action involves separate claims; second, there is a final decision as to at least one of these claims; and third, there has been an express, and proper, determination that there is no just reason for delay.  More Like This Headnote

Civil Procedure > Jurisdiction > Subject Matter Jurisdiction > Supplemental Jurisdiction 
Civil Procedure > Appeals > Appellate Jurisdiction > Interlocutory Orders 
 

HN2

The doctrine of pendent appellate jurisdiction permits a federal appellate court to exercise jurisdiction over an ordinarily unappealable interlocutory order only when it is inextricably entwined with an appealable interlocutory order and there are compelling reasons for not deferring the appeal of the former order to the end of the lawsuit. The doctrine of pendent appellate jurisdiction is limited in scope, and will not be held applicable merely because the orders are related.  More Like This Headnote

Civil Procedure > Summary Judgment > Summary Judgment Standard 
Civil Procedure > Appeals > Standards of Review > De Novo Review 
 

HN3

When a federal district court's decision is an entry of summary judgment, a federal appellate court's review is de novo, and it will draw all reasonable inferences in favor of the nonmoving parties. Under Fed. R. Civ. P. 56(c), summary judgment is appropriate only if there is no genuine issue as to any material fact and that the moving parties are entitled to judgment as a matter of law.  More Like This Headnote

Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Fiduciary Responsibilities 
 

HN4	According to the Employment Retirement Income Security Act § 409 (ERISA), 18 U.S.C.S. § 1109, plan fiduciaries are personally liable for violations of ERISA §§ 404 and 406, 29 U.S.C.S. §§ 1104 and 1106.  More Like This Headnote

Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Civil Claims & Remedies 
 

HN5	See U.S.C.S. § 1113.

Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Civil Claims & Remedies 
Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Fiduciary Responsibilities 
 

HN6

To charge a party with actual knowledge of a violation of the Employment Retirement Income Security Act, 29 U.S.C.S. §§ 1101 et seq., it is not enough that he had notice that something was awry; he must have had specific knowledge of the actual breach of duty upon which he sues. At the same time, the relevant knowledge for triggering the statute of limitations is knowledge of the facts or transaction that constituted the alleged violation. Consequently, it is not necessary for a potential plaintiff to have knowledge of every last detail of a transaction, or knowledge of its illegality.  More Like This Headnote

Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Fiduciary Responsibilities 
 

HN7	There is a continuing nature of a trustee's duty under the Employee Retirement Income Security Act to review plan investments and eliminate imprudent ones. 29 U.S.C.S. § 1104(a)(1)(B).  More Like This Headnote

Civil Procedure > Pleading & Practice > Defenses, Objections & Demurrers > Affirmative Defenses 
Torts > Public Entity Liability > Immunity 
Governments > Federal Government > Claims By & Against 
 

HN8	As a general rule, the United States is not subject to the equitable defense of laches in enforcing its rights. An exception to this rule has been created in cases brought by the Equal Employment Opportunity Commission asserting the tights of individual claimants.  More Like This Headnote

Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Civil Claims & Remedies 
Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Procedures 
Governments > Legislation > Statutes of Limitations > Statutes of Limitations Generally 
 

HN9

Congress has specified the limitations period governing actions brought under the Employment Retirement Income Security Act, 29 U.S.C.S. §§ 1101 et seq.; in fact, it has specified, in 29 U.S.C.S. § 1113, that period in a variety of circumstances, providing that a plaintiff must sue within six years from the last date of a breach, within three years from the date on which the plaintiff had actual knowledge of a breach or, in the case of fraud or concealment, within six years from the date of discovery of a breach.  More Like This Headnote

Civil Procedure > Pleading & Practice > Defenses, Objections & Demurrers > Affirmative Defenses 
 

HN10	Laches is a species of estoppel and thus requires a showing of (1) unreasonable delay and (2) harm or prejudice to the defendant.  More Like This Headnote

Pensions & Benefits Law > Employee Retirement Income Security Act (ERISA) > Civil Claims & Remedies 
Governments > Legislation > Statutes of Limitations > Time Limitations 
Governments > Legislation > Statutes of Limitations > Tolling 
 

HN11	29 U.S.C.S. § 1113 provides that in the case of fraud or concealment, a lawsuit may be commenced not later than six years after the date of discovery of such breach or violation.  More Like This Headnote

Governments > Legislation > Statutes of Limitations > Time Limitations 
Governments > Legislation > Statutes of Limitations > Tolling 
 

HN12

In a self-concealing acts case, it is not enough that an act be a substantive fraud in order to extend the statute of limitations; rather, the defendant must engage in some misleading, deceptive or otherwise contrived action or scheme, in the course of committing the wrong, that is designed to mask the existence of a cause of action.  More Like This Headnote

Governments > Federal Government > Employees & Officials 
 

HN13	Knowledge in the possession of a government agent with a duty to disclose is imputed to the government.  More Like This Headnote

Criminal Law & Procedure > Grand Juries > Secrecy 
Governments > Federal Government > Employees & Officials 
 

HN14

Fed. R. Crim. P. 6(e)(3)(B) states that government personnel who are called on to assist government attorneys shall not utilize that grand jury material for any purpose other than assisting the attorney for the government in the performance of such attorney's duty to enforce Federal criminal law.  More Like This Headnote

Criminal Law & Procedure > Grand Juries > Secrecy 
 

HN15	The general rule is that Fed. R. Crim. P. 6(e)'s nondisclosure requirement applies to anything that may reveal what occurred before the grand jury.  More Like This Headnote

COUNSEL: NO. 90-3113: For HENRY ARGENTA, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For ANN E. MCLAUGHLIN, Plaintiff - Appellee: Steven J. Mandel, 202/523-8145, Allen H. Feldman, Kerry L. Adams, FTS 523-8247, 202/523-8237, Room N-2700, DEPARTMENT OF LABOR, Appellate Litigation, 200 Constitution Avenue N.W., Washington, DC 20210, USA, Edward D. Sieger, FTS 523-8247, 202/523-8247, Ste N-2700, Bruce F. Rinaldi, 312/975-7788, William Zuckerman, DEPARTMENT OF LABOR, Office of the Solicitor, 200 Constitution Avenue N.W., Washington, DC 20210, USA, John H. Secaras, SG, 312/353-7256, 8th Floor, Leonard A. Grossman, 312/353-5709, 8th Floor, DEPARTMENT OF LABOR, 230 S. Dearborn Street, Chicago, IL 60604, USA, Mark I. Machiz, 202/523-9141, DEPARTMENT OF LABOR, Office of the Solicitor, P.O.  [**2]  Box 1914, Washington, DC 20013, USA. For JOE DEROSE, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For ERNEST KUMEROW, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JOE NERONI, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JAMES O'BRIEN, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For FRANK RILEY, Plaintiff - Appellee: John J.  [**3]  Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For RAYMOND R. BECKER, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For DONALD W. DVORAK, Plaintiff - Appellee: Allan E. Lapidus, 312/609-7500, Suite 2600, Patricia Cook, 312/609-7500, Suite 2600, Thomas L. O'Brien, 312/609-7500, Suite 2600, VEDDER, PRICE, KAUFMAN & KAMMHOLZ, 222 N. LaSalle Street, Chicago, IL 60601, USA, John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA. For WILLIAM O. KINAST, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For DANTE ORFEI, Plaintiff - Appellee:  [**4]  John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For ALFRED N. BEDERMAN, Plaintiff - Appellee: Allan E. Lapidus, 312/609-7500, Suite 2600, Patricia Cook, 312/609-7500, Suite 2600, Thomas L. O'Brien, 312/609-7500, Suite 2600, VEDDER, PRICE, KAUFMAN & KAMMHOLZ, 222 N. LaSalle Street, Chicago, IL 60601, USA, John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA. For SAN VINCI, Plaintiff - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA.
 
For CONSULTANTS & ADMINISTRATORS, INCORPORATED, Defendant - Appellant: Phillip J. Zisook, 312/750-6750, Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For JAMES F. NORTON, Defendant - Appellant: Phillip J. Zisook, 312/750-6750,  [**5]  Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For PAUL A. FOSCO, Defendant - Appellant: Phillip J. Zisook, 312/750-6750, Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA.
 
NO. 90-2568: For ELIZABETH H. DOLE, Secretary of the United States Department of Labor, Plaintiff - Appellee: Gillum Ferguson, AUSA, 312/353-5300, OFFICE OF THE UNITED STATES ATTORNEY, Criminal Division, 219 S. Dearborn Street, Chicago, IL 60604, USA, Steven J. Mandel, 202/523-8145, Allen H. Feldman, Kerry L. Adams, FTS 523-8247, 202/523-8237, Room N-2700, DEPARTMENT OF LABOR, Appellate Litigation, 200 Constitution Avenue N.W., Washington, DC 20210, USA, Edward D. Sieger, FTS 523-8247, 202/523-8247, Ste N-2700, DEPARTMENT OF LABOR, Office of the Solicitor, 200 Constitution Avenue, N.W., Washington, DC 20210, USA, John H. Secaras, SG, 312/353-7256, 8th Floor, Leonard A. Grossman, 312/353-5709, 8th Floor, DEPARTMENT OF LABOR, 230 S. Dearborn Street, Chicago, IL 60604, USA.
 
For WALTER HARDY, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah [**6]  Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JOSEPH J. SPINGOLA, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For L. E. GIANETTI, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For HENRY ARGENTA, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive,  [**7]  Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JOE DEROSE, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For ERNEST KUMEROW, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JOE NERONI, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington,  [**8]  DC 20005, USA. For JAMES O'BRIEN, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For FRANK RILEY, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For RAYMOND R. BECKER, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For WALTER BOMBARD, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler,  [**9]  312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For WILLIAM O. KINAST, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For DANTE ORFEI, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For SAM VINCI, Defendant - Appellant: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500,  [**10]  Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For VINCENT F. DEROSE, Defendant - Appellant: Wayne B> Giampietro, 312/332-6000, Suite 2700, WITWER, BURLAGE, POLTROCK & GIAMPIETRO, 125 S. Wacker Drive, Chicago, IL 60606, USA.
 
NO. 90-2450: For ELIZABETH H. DOLE, Secretary of the United States Department of Labor, Plaintiff - Appellant: Steven J. Mandel, 202/523-8145, Allen H. Feldman, Kerry L. Adams, FTS 523-8247, 202/523-8237, Room N-2700, DEPARTMENT OF LABOR, Appellate Litigation, 200 Constitution Avenue N.W., Washington, DC 20210, USA, Edward D. Sieger, FTS 523-8247, 202/523-8247, Ste N-2700, Bruce F. Rinaldi, 312/975-7788, William Zuckerman, DEPARTMENT OF LABOR, Office of the Solicitor, 200 Constitution Avenue N.W., Washington, DC 20210, USA, John H. Secaras, SG, 312/353-7256, 8th Floor, Leonard A. Grossman, 312/353-5709, 8th Floor, DEPARTMENT OF LABOR, 230 S. Dearborn Street, Chicago, IL 60604, USA, Marc I. Machiz, 202/523-9141, DEPARTMENT OF LABOR, Office of the Solicitor, P.O. Box 1914, Washington, DC 20013, USA.
 
For CONSULTANTS & ADMINISTRATORS, INCORPORATED, Defendant - Appellee: Phillip J. Zisook, 312/750-6750, Suite 2600,  [**11]  Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For JAMES F. NORTON, Defendant - Appellee: Phillip J. Zisook, 312/750-6750, Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For PAUL A. DIFRANCO, Defendant - Appellee: Thomas A. Foran, 312/368-8330, Carmen D. Caruso, 312/368-8330, Suite 3000, Jack J. Carriglio, 312/368-8330, FORAN & SCHULTZ, 30 N. LaSalle Street, Chicago, IL 60602, USA. For CATHERINE MILANO, Defendant - Appellee: Francis D. Morrissey, 312/861-2819, 27th Floor, Michael A. Pollard, 312/861-2786, William J. Linklater, 312/861-2794, BAKER & MCKENZIE, 130 E. Randolph Drive, 2700 Prundential Plaza, Chicago, IL 60601, USA. For PAUL A. FOSCO, Defendant - Appellee: Phillip J. Zisook, 312/750-6750, Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For EDWARD HURLEY, Defendant - Appellee: William J. Hurley, III, 312/464-3500, Suite 900, James M. Crowley, 312/464-3500, Suite 900, Mara S. Georges, Below Address Terminated on 7/30/90, 312/464-3500,  [**12]  Suite 900, ROCK, FUSCO, REYNOLDS & GARVEY, 350 N. LaSalle Street, Chicago, IL 60610, USA. For D.D.S., LIMITED, Defendant - Appellee: Thomas A. Foran, 312/368-8330, Carmen D. Caruso, 312/368-8330, Suite 3000, Jack J. Carriglio, 312/368-8330, FORAN & SCHULTZ, 30 N. LaSalle Street, Chicago, IL 60602, USA. For PINCKARD & ASSOCIATES, Defendant - Appellee: Phillip J. Zisook, 312/750-6750, Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA, Judy Smith, 312/715-4000, Suite 4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For JAMES H. PINCKARD, Defendant - Appellee: Phillip J. Zisook, 312/750-6750, Suite 2600, Samuel J. Betar, 312/715-4000, Paul J. Petit, 312/715-4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA, Judy Smith, 312/715-4000, Suite 4000, ALTHEIMER & GRAY, 10 S. Wacker Drive, Chicago, IL 60606, USA. For JAMES CAPORALE, Defendant - Appellee: Carl M. Walsh, 312/332-7374, Suite 820, 39 S. LaSalle Street, Chicago, IL 60603, USA. For WALTER HARDY, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory [**13]  M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For ALFRED PILOTTO, Defendant - Appellee: Carl M. Walsh, 312/332-7374, Suite 820, 39 S. LaSalle Street, Chicago, IL 60603, USA. For JOSEPH J. SPINGOLA, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For L. E. GIANETTI, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For HENRY ARGENTA, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory  [**14]  M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JOE DEROSE, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For ERNEST KUMEROW, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JOE NERONI, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON &  [**15]  GIBBS, 1301c K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For JAMES O'BRIEN, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For FRANK RILEY, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For RAYMOND R. BECKER, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For WALTER BOMBARD, Defendant - Appellee: Dan K. Webb, 312/558-5600,  [**16]  Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For DONALD W. DVORAK, Defendant - Appellee: Allan E. Lapidus, 312/609-7500, Suite 2600, Patricia Cook, 312/609-7500, Suite 2600, Thomas L. O'Brien, 312/609-7500, Suite 2600, VEDDER, PRICE, KAUFMAN & KAMMHOLZ, 222 N. LaSalle Street, Chicago, IL 60601, USA. For WILLIAM O. KINAST, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For DANTE ORFEI, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street [**17]  N.W., 1 Franklin Square, Washington, DC 20005, USA. For ALFRED N. BEDERMAN, Defendant - Appellee: Allan E. Lapidus, 312/609-7500, Suite 2600, Patricia Cook, 312/609-7500, Suite 2600, Thomas L. O'Brien, 312/609-7500, Suite 2600, VEDDER, PRICE, KAUFMAN & KAMMHOLZ, 222 N. LaSalle Street, Chicago, IL 60601, USA. For SAM VINCI, Defendant - Appellee: Dan K. Webb, 312/558-5600, Deborah Gage Haude, 312/558-5600, James R. Vogler, 312/558-5600, Gregory M. Garger, 312/558-5600, WINSTON & STRAWN, 35 W. Wacker Drive, Chicago, IL 60601, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington, DC 20005, USA. For VINCENT F. DEROSE, Defendant - Appellee: Wayne B. Giampietro, 312/332-6000, Suite 2700, WITWER, BURLAGE, POLTROCK & GIAMPIETRO, 125 S. Wacker Drive, Chicago, IL 60606, USA. For HEALTH & WELFARE DEPARTMENT OF THE CONSTRUCTION AND GENERAL LABORERS' DISTRICT COUNCIL OF CHICAGO AND VICINITY, Defendant - Appellee: John J. Toomey, Hugh B. Arnold, 312/236-0415, ARNOLD & KADJAN, 19 W. Jackson Boulevard, Chicago, IL 60604, USA, Steven J. Sacher, 202/682-4500, Suite 800E, JOHNSON & GIBBS, 1301 K Street N.W., 1 Franklin Square, Washington,  [**18]  DC 20005, USA.

JUDGES: Before CUDAHY, POSNER, and RIPPLE, Circuit Judges.

OPINIONBY: CUDAHY

OPINION:  [*1082] 

CUDAHY, Circuit Judge. In this appeal from the entry of partial summary judgment, the parties dispute the district court's ruling with respect to the viability of certain claims brought pursuant to the Employee Retirement Income Security Act (ERISA), 18 U.S.C. §§ 1001-1461. The district court held that while some claims survived the statute of limitations, others did not. We affirm in part, reverse in part and remand.

I.

On May 1, 1987, the Department of Labor (DOL) filed suit against both the trustees of a multi-employer health and welfare fund and Consultants & Administrators, Inc. (C&A), a corporation that supplied the fund with dental services. The welfare fund was operated by the Construction and General Laborers District Council of Chicago and Vicinity to provide medical and related services to affiliated union members. The DOL charged that the trustees had violated certain provisions of ERISA by awarding noncompetitive contracts to C&A, by operating a kickback scheme with C&A and by otherwise violating their fiduciary duties.

The defendants named in the DOL's lawsuit fell into two groups. In the first [**19]  group were two former trustees--Alfred Pilotto and James Caporale--and the C&A defendants, who were directly implicated in the kickback scheme. The alleged scheme began when C&A was awarded the dental services contract. C&A paid ten percent of its gross revenue to Pinckard & Associates, a company owned by Pilotto's son-in-law, which funneled the money to Pilotto and Caporale in the form of kickbacks. Caporale, Pilotto and four C&A defendants were convicted of charges stemming from their roles in this kickback scheme. n1 The DOL sued this group of defendants (whom we refer to as "C&A defendants") to recover the kickbacks.

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n1 Pilotto and Caporale were convicted on October 13, 1982. See United States v. Caporale, 806 F.2d 1487 (11th Cir. 1986), cert. denied, 483 U.S. 1021; 107 S. Ct. 3265; 97 L. Ed. 2d 763 (1987). The four C&A defendants--Paul Fosco, Paul DiFranco, James Norton and James Pinckard--were convicted on April 27, 1987. See United States v. Norton, 867 F.2d 1354 (11th Cir.), cert. denied, 491 U.S. 907, 493 U.S. 871 (1989).
 

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The second group of defendants in the DOL's action comprised the remaining trustees--or in the district court's phrase, the "innocent trustees" (we refer to this group simply as "trustees"). These trustees claimed to have no knowledge of the kickback scheme with C&A. The DOL maintained, however, that the trustees had violated ERISA in three ways: (1) by failing to monitor adequately C&A's services to ensure that C&A's prices were not excessive (the "monitoring claim"); (2) by twice renewing the dental services contract with C&A (in 1983 and again in 1986) without soliciting comparable bids from other dental service providers (the "bidding claim"); and (3) by failing to take steps to recover the kickbacks paid to Caporale and Pilotto by C&A (the "kickback claim").

The trustees brought their own suit against the C&A defendants on May 29, 1987. Like the DOL's suit filed 28 days earlier, the trustees' action sought recovery of the kickbacks paid to Caporale and Pilotto. n2

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n2 The plaintiff-trustees in the action against C&A are not identical to the defendant-trustees in the DOL's lawsuit, although some individuals are in both groups. For simplicity, we refer to both as "trustees."
 

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All the defendants soon filed motions for summary judgment on the ground that the  [*1083]  claims were barred by the statute of limitations. In the DOL's suit against the trustees, the trustees asserted that all three claims (the monitoring, bidding and kickback claims) were barred by the three-year statute because the DOL knew about the relevant conduct before May 1, 1984. The district court agreed in part, but held that some of the trustees' allegedly improper activity (specifically the later monitoring and bidding conduct) occurred within the three-year limitations period and therefore was not barred. The court granted summary judgment to the trustees on claims arising before May 1, 1984, but allowed claims based on activity occurring after that date. It thus held that the monitoring and bidding claims were partially barred, but that the kickback claim was fully barred since the trustees' duty to sue to recover the kickbacks arose before May 1, 1984. n3

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n3 The DOL appeals the adverse portions of this ruling in appeal No. 90-2450, and the trustees appeal adverse portions of the ruling in the cross-appeal, No. 90-2568.
 

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The C&A defendants also moved for summary judgment on statute of limitations grounds in both the DOL's and the trustees' suits for recovery of the kickbacks. The district court, finding a six-year limitations period applicable because the suits involve fraud, held that both the DOL's and the trustees' claims against the C&A defendants survived the statute of limitations. n4

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n4 The C&A defendants appeal the district court's rulings as to both suits in appeal No. 90-3113.
 

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II.

We begin by addressing this court's jurisdiction over these appeals. In both the DOL's and the trustees' actions against the C&A defendants, the district court found the suits to be timely and accordingly denied the defendants' motions for summary judgment. In an order dated May 4, 1990, the district court certified this ruling for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), Finding that it involved a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal may materially [**23]  advance the ultimate termination of the litigation. A panel of this court granted leave to appeal on September 4, 1990, concluding that "all questions concerning the statute of limitations" should be resolved in a single appeal. The C&A defendants' appeal in No. 90-3113 is properly before the court.

In the DOL's suit against the trustees, the district court granted summary judgment in favor of the trustees as to certain claims (specifically, the pre-May 1, 1984 bidding and monitoring claims and the kickback claim). The district court entered final judgment on those claims on May 4, 1990, certifying under Fed. R. Civ. P. 54(b) that there was no just reason for delay. We agree with the district court that ^HN1the three prerequisites for an appealable judgment under Rule 54(b) are met here: first, the action involves separate claims; second, there is a final decision as to at least one of these claims; and third, there has been an express--and proper--determination that there is no just reason for delay. Stearns v. Consolidated Management, Inc., 747 F.2d 1105, 1108 (7th Cir. 1984). In particular, allowing this case to proceed to trial before a final resolution of the [**24]  statute of limitations issues might necessitate a second trial after a later appeal. The DOL's appeal (No. 90-2450) from the order granting partial summary judgment is therefore proper.

That leaves the trustees' cross-appeal from the district court's partial denial of their summary judgment motion. (The court denied summary judgment as to the DOL's post-May 1, 1984 bidding and monitoring claims.) This ruling, however, because it lacks a certification under either Rule 54(b) or 28 U.S.C. § 1292(b), appears not to be a final, appealable order. The parties argue that the trustees' cross-appeal is nevertheless proper under ^HN2the doctrine of pendent appellate jurisdiction. That doctrine permits us to exercise jurisdiction over an ordinarily unappealable interlocutory  [*1084]  order only when it is "inextricably entwined" with an appealable interlocutory order and there are "compelling reasons for not deferring the appeal of the former order to the end of the lawsuit." United States ex rel. Valders Stone & Marble, Inc. v. C-Way Construction Co., 909 F.2d 259, 262 (7th Cir. 1990) (quoting Illinois ex rel. Hartigan v. Peters, 861 F.2d 164, 166 (7th Cir. 1988)). [**25]  As we have emphasized, the doctrine of pendent appellate jurisdiction is limited in scope, and will not be held applicable merely because the orders are related. See Patterson v. Portch, 853 F.2d 1399, 1403 (7th Cir. 1988). In the present case, we find that the DOL's appeal and the trustees' cross-appeal are indeed inextricably entwined. Both involve the same facts and turn on precisely the same issue: at what point the DOL's knowledge triggered the three-year statute of limitations to bar the DOL's claims. As in Peters, the appeals are thus "the head and tail of the same coin," 861 F.2d at 166, and concerns of judicial economy justify our exercise of jurisdiction over both appeals together. The trustees' cross-appeal (No. 90-2568) is properly before us.

III.

^HN3Because the district court's decision was an entry of summary judgment, our review is de novo, and we draw all reasonable inferences in favor of the nonmoving parties. Allensworth v. General Motors Corp., 945 F.2d 174, 178 (7th Cir. 1991). Summary judgment is appropriate only if we find that there is no genuine issue as to any material fact and that the moving  [**26]  parties are entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Old Republic Ins. Co. v. Federal Crop Ins. Corp., 947 F.2d 269, 273 (7th Cir. 1991).

These actions allege fiduciary violations under sections 404 and 406 of ERISA, 29 U.S.C. §§ 1104 & 1106. ^HN4Plan fiduciaries are personally liable for such violations. 29 U.S.C. § 1109. The applicable statute of limitations provides as follows:

^HN5No action may be commenced under this subchapter with respect to a fiduciary's breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of

(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission, the latest date on which the fiduciary could have cured the breach or violation, or

(2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation;
 
except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.
 
29 U.S.C. § 1113.
 
A. DOL v. Trustees

In the DOL's suit [**27]  against the trustees, the three-year "actual knowledge" provision of 29 U.S.C. § 1113(2) is at issue. Because the DOL brought suit on May 1, 1987, the crucial date for statute of limitations purposes is May 1, 1984: if the DOL had actual knowledge of a "breach or violation" before that date, then its suit is time barred as to that breach or violation. We begin by reviewing the DOL's activities that potentially gave rise to actual knowledge of the trustees' alleged violations.

1. Background

The DOL began investigating the fund's relationship with C&A as early as 1977, but nothing developed after initial phases of the investigation concluded. The first DOL investigation began in January 1977 but was terminated in June of the same year; the records of this investigation were apparently destroyed, so its findings are unclear. A second DOL investigation began in 1978, but was called off in 1979 at the request of the U.S. Attorney. At this time the Department of Justice and its Chicago and Miami strike forces were conducting an independent investigation which ultimately led to the indictments and convictions of former trustees Caporale and Pilotto. Caporale and Pilotto were indicted [**28]  for their role in the kickback scheme on  [*1085]  June 3, 1981, and convicted on October 13, 1982.

The DOL officially opened its third investigation of the fund in January 1983, although the investigation did not actually begin until September. During September the DOL conducted an onsite audit of the fund's records and interviewed its attorney, Marc Pekay. DOL investigator Sammiesteen Haynes-Green conducted the interview, which focused on the relationship between the fund and C&A. Haynes-Green was informed of the methods that the trustees used in selecting C&A for its dental services contract and in monitoring C&A's performance and fees. She learned that the trustees retained the Martin E. Segal Company to prepare, solicit and analyze bids, and that the trustees monitored C&A primarily in two ways: through quarterly reports of a panel of independent dentists (the "Peer Review Committee") on the quality of performance and the reasonableness of fees; and through "utilization reports" prepared by C&A, which showed the value of services compared to the amount of premium paid. In a memo prepared before January 16, 1984, Haynes-Green concluded that, in their bidding procedures for the previous [**29]  contract (the 1980-83 contract), the trustees had not considered bids from plans comparable to that of C&A i.e., other "closed-panel" plans. n5 The minutes of trustee board meetings made available to the DOL in February 1984 revealed that the trustees decided to continue selecting bids and monitoring service providers as it had done in the past. In December 1983 a new contract (the 1984-86 contract) was awarded to C&A.

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n5 "Closed-panel" plans are those in which beneficiaries are assigned to certain designated clinics; "open-panel" or "free-choice" plans are plans in which beneficiaries go to the dentist of their choice, who is then reimbursed by the plan.
 

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On April 5, 1984, Haynes-Green filed a report in which she compared the fee schedules under the C&A contract with a schedule of standard fees supplied by the American Dental Association. On May 2, 1984, the fund gave the DOL a bid analysis it had prepared for its new (1984-86) dental services contract. The analysis showed that the trustees had in fact continued [**30]  to conduct business as usual in their award of the new contract: the only closed-panel bid was submitted by C&A.

The district court, applying the three-year statute of limitations of 29 U.S.C. § 1113(2), held that any bidding or monitoring claim that arose after May 1, 1984 was viable. Thus the DOL's bidding claim based on the most recent contract (the 1987 contract, which was renewed in 1986) and its claim based on post-May 1, 1984 monitoring activity survived. But the DOL's claim for bidding on the 1984 contract (which occurred in 1983) and the pre-May 1, 1984 monitoring claim were held to be barred. On appeal, the battle lines are clearly drawn: the DOL argues that none of its claims are barred by the statute of limitations, while the trustees argue that all of the DOL's claims are barred.

2. Actual Knowledge

The thrust of the DOL's argument is that the district court failed to apply the standard of "actual knowledge," but instead allowed mere constructive knowledge to trigger the limitations period. n6 At no  [*1086]  time before May 1, 1984, contends the DOL, did it have actual knowledge of an ERISA violation on the part of the trustees. In addition, the DOL maintains that the [**31]  district court improperly lumped together distinct violations, finding the DOL to have had knowledge of an overly general transaction which the court characterized as "continued careless dealings with C&A."

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n6 Before it was amended in 1987, section 1113 contained a constructive knowledge provision, stating that the three-year limitations period began when a plaintiff "could reasonably be expected to have obtained knowledge" from certain reports filed with the Secretary of Labor. 29 U.S.C. § 1113(a)(2)(B) (repealed by Omnibus Budget Reconciliation Act, Pub. L. No. 203, § 9342, 101 Stat. 1330, 1330-371 (1987)). This constructive knowledge provision is not at issue in the present case. The DOL suggests, however, that the district court mistakenly applied it rather than the actual knowledge provision. The DOL points to the court's reliance upon Brock v. TIC Int'l Corp., 785 F.2d 168 (7th Cir. 1986)--a case that applied the deleted constructive knowledge provision--and particularly the district court's quotation of the following language from TIC Int'l:
 
The purpose of the three-year statute of limitations is to penalize the Department not for extraordinary diligence and imagination in scrutinizing reports but for negligent dawdling in the face of unmistakable evidence of a probable violation.
 
Mem. Op. & Order at 15 (Dec. 21, 1989) (quoting