Boeing Settles Retirement Class Action Lawsuit

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Last week, a settlement agreement was reached in the class action lawsuit over allegedly excessive fees and hidden costs charged by Boeing Co. for their 401(k) retirement fund.

A group of retirement fund investors and Boeing employees filed the class action lawsuit against Boeing in 2006 alleging that the managers of the 401k plan hid excessive fees charged by the plan in exchange for kickbacks and revenue-sharing fees. The plaintiffs claimed that Boeing violated under the Employee Retirement Income Security Act and also argued the breaches occurred on a plan-wide basis, not the individual level, thus affecting all plan participants. The plaintiffs alleged that they lost retirement savings as well.

A bench trial was set to begin in Illinois federal court last week, but the parties avoided it by entering into the deal. Deadlines for the preliminary settlement will be discussed later in September.

Before the start of the trial, the Boeing issued a statement saying that the company “strongly disagrees with the claims made by the plaintiffs and is prepared to show at trial that all plan investment options and fees were carefully monitored, prudent and in line with the best practices in the 401(k) industry.”

The Boeing 401k Class was certified, but in 2011, the Seventh Circuit reversed the order and remanded the case after finding the Class definition didn’t meet typicality or adequacy requirements. Boeing successfully argued that the Class definition did not meet the typicality and adequacy requirements of Rule 23(a) or the requirements of Rule 23(b)(1). Regarding typicality, the Seventh Circuit noted that this requirement ensures that there is enough congruence between the named representative’s claim and that of the unnamed members of the Class to justify allowing the named party to litigate on behalf of the group. According to Boeing’s argument, adequacy ensures not only that the counsel representing the plaintiffs are competent, but also that the named representatives have no conflicts with the other proposed Class Members.

In 2013, U.S. District Judge David R. Herndon certified the Class again, ruling that the plaintiffs had sufficiently limited the size of the proposed Class. The judge noted that the Class no longer contained all past and future participants in the plan and therefore was no longer “breathtaking in its scope” or too broad, as the Seventh Circuit had previously found. The Class was limited to approximately 170,000 people and the plaintiffs limited the Class size to plan participants who’d had an account balance between September 2000 and December 2006 — the time period when they allegedly paid unreasonable record-keeping fees.

More information about the Boeing 401k class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The plaintiffs are represented by Jerome J. Schlichter, Mark G. Boyko, Heather Lea and Sean E. Soyars of Schlichter Bogard & Denton LLP. Boeing is represented by Thomas E. Wack and Jeffrey S. Russell of Bryan Cave LLP and Brian Boyle, Shannon Barrett and Meaghan VerGow of O’Melveny & Myers LLP.

The Boeing 401(k) Retirement Class Action Lawsuit is Gary Spano, et al. v. the Boeing Co., et al., Case No. 3:06-cv-00743, in the U.S. District Court for the Southern District of Illinois.