On remand,Christian Louboutin Pumps the Northern District of California grappled with the open question of whether plaintiffs are required to demonstrate reasonable reliance on the favorable formula in the SPDs to be awarded additional benefits.11 Recognizing that the Ninth Circuit had not weighed in on the reliance debate, the Skinner court reviewed the landscape of christian louboutin shoes jurisprudence across the nation.12 The court cited district court cases from within the Ninth Circuit that imposed the reliance requirement to recover for a claim based on a defective SPD, which it found consistent with a long line of Ninth Circuit cases requiring reasonable reliance prior to recovery for ERISA disclosure violations.
Among other cases discussed, the Skinner court held that a Ninth Circuit Court of Appeals case from 2002, Bergt v. Retirement Plan for Pilots Employed by Mark Air, Inc.,14 had no explicit discussion of reliance and, therefore, did not appreciably add anything to the discussion.15 The Skinner court then held that the majority of circuits outside the Ninth Circuit require either a showing of reasonable reliance or a more stringent showing of prejudice.16 Accordingly, the Skinner court held that the plaintiffs must demonstrate reasonable reliance to prevail on their claim. 17 Bolstering its conclusion, the Skinner court noted that failing to impose a reasonable reliance requirement would, Christian Louboutin in effect, impose strict liability on employers for a defective SPD.
Such a result would provide “create an actuarial and funding nightmare” by providing “an unintended . . . windfall” to participants – something Congress cannot have envisioned.19 Liability under these circumstances, reasoned the Skinner court, would deter employers from offering ERISA plans in the first place.
After this finding, the only task left before the Skinner court was applying the reliance requirement to the plaintiffs. The court concluded that the evidence demonstrated the plaintiffs did not, and the plaintiffs’ proferred action allegedly taken in reliance of the defective SPD – remaining employed at Northrop longer than they otherwise would have – did not establish that the plaintiffs lost any benefit and that the plaintiffs knew their retirement benefit would be calculated as set out in the Section 204(h) Notice.21 Accordingly, the Skinner court granted the defendants’ motion for summary judgment on the claim for benefits.