On February 5, 1992, an employee of Lockheed Corporation filed a lawsuit under ERISA and the ADEA against Lockheed Corporation in the United States District Court for the Central Division of California. The plaintiff, represented by private counsel, had been employed at Lockheed Corporation from 1939 until 1950, when he left to work for a competitor. When he was 61 years old, Plaintiff returned to Lockheed Corporation. At that time, Lockheed's Retirement Plan excluded from participation those employees who were over the age of 60 when hired. However, in 1986, the Omnibus Budget Reconciliation Act (OBRA) was passed to prohibit employers from excluding employees from a pension plan on the basis of age.

Lockheed ceased its prior practice, and Plaintiff became a member of the Plan; however, Defendant did not credit Plaintiff for his years of service before he became a member of the Plan. Later, Defendant amended its Plan to create retirement programs; employees who participated in the program were required to release any employment-related claims they might have. Plaintiff declined to participate in a retirement program because he did not wish to waive any ERISA or ADEA claims.

Plaintiff's complaint alleged that, among other things: (1) Lockheed violated ERISA's duty of care by amending the Plan to create the retirement program; and, (2) OBRA required that Defendant count Plaintiff's pre-OBRA service years toward his accrued pension benefits. Plaintiff sought monetary, declaratory, and injunctive relief.

On July 31, 1992, the Court (Judge Stephen V. Wilson) granted Defendant Lockheed Corporation's Motion to Dismiss. Spink v. Lockheed Corp., 1992 WL 437985 (C.D. Cal. Jul. 31, 1992). Specifically, the Court held that Plaintiff was not entitled to participate in the plan retroactively or to accrue benefits retroactively. Further, the Court found that Plaintiff failed to allege a violation of fiduciary duty under ERISA.

On July 18, 1995, the Ninth Circuit Court of Appeals (Judges Dorothy Wright Nelson, Stephen Reinhardt, and Melvin Brunetti) affirmed in part and reversed in part the District Court's dismissal of Plaintiff's complaint. Spink v. Lockheed Corp., 60 F.3d 616 (9th Cir. 1995). Reversing the District Court, the Court of Appeals concluded that Defendant's 1990 Plan amendments violated ERISA. Affirming the District Court, the Court of Appeals held that Plaintiff could not use issue preclusion to bar Defendant from contesting Plaintiff's fiduciary breach claim. Further, the Court held that Plaintiff was entitled to attorneys' fees because Defendant's arguments regarding the validity of the Plan amendments were meritless.

The United States Supreme Court granted a writ of certiorari. Reversing the Ninth Circuit Court of Appeals, Justice Thomas delivered the opinion of the Court on June 10, 1996. Spink v. Lockheed Corp., 517 U.S. 882 (1996). The Court applied a rule relating to amendment of welfare benefit plans announced in Curtiss-Wright Corp. v. Schoonejongen; under this rule, when employers or other plan sponsors adopt, modify, or terminate pension plans, they do not act as fiduciaries. Further, the Court held that the relevant sections of OBRA did not apply retroactively to require Defendant to use pre-1988 service years in calculating Plaintiff's benefits.

On remand, on September 10, 1997, the Ninth Circuit Court of Appeals considered whether Plaintiff could state a cause of action under ERISA §§ 403, 404, or 405, or under equitable estoppel principles, because the Supreme Court did not address these issues. Spink v. Lockheed Corp., 125 F.3d 1257 (9th Cir. 1997). The Court held that Defendant did not violate § 403 because "an employer has discretion to decide how to use an asset surplus attributable solely to employer contributions." Further, Defendant did not violate §§ 404 and 405 because the Supreme Court expressly held that Defendant was not acting as a fiduciary. Finally, the Court held that the District Court erred in dismissing Plaintiff's equitable estoppel claim because Plaintiff alleged sufficient facts to support a claim that he reasonably relied upon an interpretation of ambiguous Plan provisions.

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