Appeals court allows Boeing 401(k) plan case to proceed as class action.
On November 26, 2013, the Seventh Circuit Court of Appeals rejected the Boeing Company's request to appeal the order of Chief Judge David R. Herndon of the United States District Court for the Southern District of Illinois, which granted class certification to participants in Boeing's 401(k) Plan, one of the largest in the United States, for their claims that Boeing personnel responsible for managing the plan breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA). Spano v. Boeing Co., No. 13-8026 (7th Cir.). Schlichter, Bogard & Denton has been appointed class counsel for the participant class, which consists of 170,000 Boeing employees and retirees. The ruling clears the way for the class to proceed to a resolution of their claims that the 401(k) plan had excessive fees and imprudent investment options.
Jerome Schlichter, who is handling the case, said: this has been a long battle. The case will now proceed on behalf of the Boeing employees and retirees, and we are planning to go to trial on their behalf as soon as we can.
Earlier this year, the court affirmed the propriety of ERISA fiduciary breach class actions on behalf of 401(k) participants in another Schlichter, Bogard & Denton case Abbott v. Lockheed Martin Corp., 725 F.3d 803 (7th Cir. 2013). After Abbott, Judge Herndon in the Boeing case certified for class treatment five claims arising from Boeing's mutual fund selections, revenue sharing and fee practices, and the management of the Boeing Company Stock Fund. The Seventh Circuits rejection of the appeal vindicates the ability of 401(k) plan participants in this and other cases to enforce their rights under federal law to hold plan fiduciaries to high standards of care and diligence when managing retirement assets.
Schlichter, Bogard & Denton remains at the forefront of prosecuting ERISA fiduciary breach actions in 401(k) plans. The Boeing case was one of a number of cases filed by the firm, which launched the field of 401(k) fiduciary breach actions for excessive fees. After years of litigation, Schlichter, Bogard, & Denton recently won a $50 million judgment from ABB and Fidelity in a case on behalf of ABB employees and retirees in ABBs 401(k) plan, after the first full trial of a 401(k) excessive fee claim in the country. Tussey v. ABB, Inc., Case No. 06-4305 (W.D. Mo.) The firm has also settled cases on behalf of participants in the 401(k) plans of International Paper, Cigna, Caterpillar, General Dynamics, Kraft Foods, and Bechtel totaling over $120 million. Beesley v. Intl Paper Co., Case No. 06-703 (S.D.Ill.); Nolte v. CIGNA Corp., Case No. 07-2046 (C.D.Ill.); Martin v. Caterpillar, Inc., Case No. 07-1009 (C.D.Ill.); Will v. General Dynamics Corp., Case No. 06-698 (S.D.Ill.); Kanawi v. Bechtel Corp., Case No. 06-5566 (N.D.Cal.); George v. Kraft Foods Global, Inc., Case Nos. 07-1713 & 08-3799 (N.D.Ill.). The recent $35 million CIGNA 401(k) plan settlement is the largest ever for 401(k) plan investors in an excessive fee case. The federal court in that case noted that the firms work has directly caused a reduction in fees throughout the 401(k) industry, finding that Class Counsels enforcement of ERISAs fiduciary obligation has contributed to rapid reductions in the level of 401(k) recordkeeping fees paid across the country, resulting in $2.8 billion in annual savings for American workers and retirees.
About Schlichter, Bogard & Denton, LLP
Schlichter, Bogard & Denton, LLP is a unique national law firm that represents individuals, including 401(k) plan investors, whose plans suffer from excessive fees or imprudent investment options. Its attorneys are dedicated to helping employees and retirees secure the retirement benefits they deserve. Anyone who has questions about the fees and investments in a 401(k) or 403(b) plan can contact Schlichter, Bogard & Denton, LLP toll-free at (800) 873-5297.
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