A U.S. District Court judge in Chicago dismissed a class-action lawsuit against Boeing Co. and its employee benefit plans committee, which alleged the company breached its fiduciary duties related to the loss in value of the company's stock fund in its employee stock ownership plan.
That lawsuit alleged the Chicago-based company and its committee breached their duties under the Employee Retirement Income Security Act of 1974 by allowing the loss of value in company stock in The Boeing Co. Voluntary Investment Plan and other defined contribution plans, following revelations of the flawed design of Boeing's 737 Max airplane.
In the dismissal filed by Judge Virginia M. Kendall on Nov. 12, the March 2019 suit filed on behalf of four plan participants "fail to meet the Dudenhoeffer standard," which refers to the U.S. Supreme Court's landmark 2014 ruling in Fifth Third Bancorp et al. vs. Dudenhoeffer et al.
The court at the time ruled that ESOPs have no special presumption of prudence in offering employer stock, erasing a 19-year legal principle — called the Moench presumption — that many plans had used as a defense in participant lawsuits that claimed a breach of fiduciary duty when company stock prices fell.
As of Dec. 31, the Boeing Co. Voluntary Investment Plan had $12.7 billion in assets, according to the company's most recent Form 5500 filing.
Bryan Watt, Boeing spokesman, declined to comment.