A federal appeals court has rejected requests from a defendant and plaintiffs to rehear Tussey vs. ABB, a fiduciary breach case.
The opinion by the 8th U.S. Circuit Court of Appeals in St. Louis was issued Tuesday. It was unsigned, and the court offered no explanation.
The court rejected requests to appeal from ABB Inc., Cary, N.C., and from plaintiffs — current and former participants in two ABB 401(k) plans — to rehear a complex split decision that had been issued by three members of the court on March 19.
That March decision:
- Upheld a federal district court judge's ruling that ABB had violated its fiduciary duties by, among other things, failing to control record-keeping costs. The district court ordered ABB to pay $13.4 million to the plaintiffs.
- Reversed the district court judge's ruling that Fidelity Investments breached its fiduciary duty by improperly managing float income — money earned from interest-bearing accounts used temporarily by 401(k) plans before plan assets are disbursed when participants move assets among investment options. The reversal removed the $1.7 million penalty assessed by the district court judge.
- Vacated the district court judge's ruling, and a $21.8 million judgment against ABB, that criticized ABB for mapping one investment in the 401(k) plans' menu — Vanguard's Wellington Fund — to the Fidelity Freedom Funds target-date series. The appeals court panel sent this matter back to the lower court “for further consideration.”
In its response Tuesday, the appeals court rejected requests by ABB and the plaintiffs to have the three-judge panel rehear elements of the case or to have the entire appeal court hear elements of the case. The parties filed separate appeals in April.
“We will press forward with the case,” said plaintiffs' attorney Jerome Schlichter, founding and managing partner of law firm Schlichter, Bogard & Denton. One possibility, he said, would be an appeal to the U.S. Supreme Court. However, he declined to comment on when or if such an appeal would be filed.
Barry Dillon, a spokesman for ABB, could not be reached for comment by press time.