On May 16, 2011, the Supreme Court clarified the showing of harm that a participant must demonstrate in order to recover on a claim involving a Summary Plan Description (SPD) that conflicts with the terms of its underlying plan document. The Supreme Court explained that the requisite level of harm for a particular case will be dependent upon the applicable equitable theory of relief. If a plaintiff can satisfy one of the standards, it may then be rebutted by the defendant – if the defendant can demonstrate that the inconsistency was a harmless error.

Prior to today’s decision, the U.S. courts of appeals had been divided on the issue of the applicable standard where an SPD conflicts with the terms of a plan document. While the 1st, 4th, 7th, 8th, 10th, and 11th Circuits all required a plan participant to demonstrate some degree of reliance or prejudice on the conflicting documents in order to recover, the 3rd, 5th, and 6th allowed a plan beneficiary to recover where there was a clear and material conflict between the SPD and the plan, regardless of whether the beneficiary could demonstrate reliance on the SPD or prejudice of the conflict.