Last week, the 7th U.S. Circuit Court of Appeals rejected Boeing’s request to appeal a lower court’s order granting class certification to Boeing’s participants in the Spano v. Boeing case. Boeing has 170,000 participants in its 401(k) plan.
The amended claim was granted because the time period was limited and the groups were divided into sub-classes. The original allegations against Citistreet, the plan’s record keeper, included:
• Imprudent inclusion of four mutual funds when institutional funds were available
• Funds charged excessive fees and kickbacks to the record keeper
• Lack of diversification of one fund and additional revenue sharing for another
• High levels of low-yielding cash in the company stock fund, allowing State Street to receive multiple layers of fees
Spano v. Boeing was one of the first excessive cases filed by the Schlichter, Bogard & Denton law firm. The ruling indicates courts’ willingness to allow class action suits if properly framed, a dynamic which plaintiff’s attorneys seem to be learning.
