The U.S. Supreme Court just opened the door for a flood of new lawsuits against 401(k) plan sponsors. Three months after hearing arguments in Tibble v. Edison International, a lawsuit focused on whether plan fiduciaries have a duty to continuously monitor their investments under ERISA, the nine justices unanimously agreed that they do. What the Supreme Court failed to comment on — and what legal experts hope will be sorted out in forthcoming case law — is just what that duty should look like.

Participants in Edison’s 401(k) plan sued the California public utility holding company in 2007, claiming that it breached its fiduciary duty by allowing expensive retail-share-class mutual funds to remain in the plan despite the existence of functionally identical, but much cheaper, institutional options. The claims applied to two rounds of mutual fund investments, made in 1999 and 2002. The lower courts — the U.S. District Court for the Central District of California and the Ninth Circuit Court of Appeals — agreed that breaches had been made, but only with regard to the 2002 investments. The selection of the 1999 investments was outside the scope of the six-year statute of limitations of the Employee Retirement Income Security Act, better known as ERISA, they ruled.

On Monday the Supreme Court rejected that reasoning, explaining that a fiduciary’s duty to ensure that a plan’s investments are appropriate doesn’t end when those investments enter the plan. A later failure to remove inappropriate investments could also trigger the six-year clock. The case law states that “a trustee has a continuing duty — separate and apart from the duty to exercise prudence in selecting investments at the outset — to monitor, and remove imprudent, trust investments,” according to the opinion written by Justice Stephen Breyer.

By vacating the Ninth Circuit’s decision and directing the appeals court to allow the plan participants to bring claims related to the 1999 investments, the Supreme Court has jump-started the process of answering once and for all the question of how such investments should be monitored.

“There is not a lot of case law on this issue aside from the general prudence standards in ERISA, and it will take some time — and probably some increased case filings — to determine the timing and regularity [of monitoring],” says Michael Graham, a Chicago-based partner at McDermott Will & Emery and co-chair of the firm’s ERISA litigation group. “This leaves a void that will definitely need to be filled.”

Plan participants and plaintiffs’ attorneys will likely be quick to fill that void, putting plan sponsors of all sizes on the firing line. But many companies have been preparing for this fight, thanks to Tibble v. Edison and other similar cases, carefully monitoring procedures in order to back up investment choices in court if needed. The Supreme Court’s decision on Monday puts a kink in this strategy, however. As Houston-based attorney Jesse Gelsomini explains, now investments “must continue to be monitored for prudence under ERISA on an ongoing basis, even if there is no material change in circumstances.”

While the question of how exactly to conduct this oversight works its way through the courts, Gelsomini, a partner in Haynes and Boone’s employee benefits, ERISA and executive compensation practices, says companies might be well served by creating their own frameworks.

“Following this decision, each employer should review the 401(k) plan’s investment policy statement to ensure it contains clear guidelines specifying how often the responsible plan fiduciary must perform a comprehensive review ... and the steps to remove an investment if it is deemed imprudent,” Gelsomini says.

Currently, many sponsors review their investments annually, but some have already begun to do so more frequently in anticipation of the Tibble v. Edison decision. Graham says he knows of companies that have been documenting their investment committees’ selections more carefully — to have a record of compliance with their duty to monitor — and making a more concerted effort to be sure the costs and fees of the funds in which they invest are commensurate with the marketplace. One reason the lower courts gave for ruling against Edison on claims related to the 2002 investments was a lack of documentation to explain why the company maintained those retail funds instead of choosing the cheaper institutional alternatives; other companies have taken note that they could face similar actions.

“What [the Supreme Court] decision does, though, is serve as a wake-up call to employers to make sure they have these benchmarks and processes in place going forward,” says Graham.

Follow Kaitlin Ugolik on Twitter at @kaitlinugolik.