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Welcome to the Class Website for Tussey v. ABB, Inc.

 

On December 29, 2006, several ABB employees and retirees filed a lawsuit on behalf of former and current participants in the PRISM Plans. The lawsuit was filed in the Western District of Missouri and the Defendants include ABB and Fidelity, the Plans’ record keeper, and the case is titled Tussey, et al v. ABB, Inc., et al, Case No. 06-04305. Plaintiffs alleged, among other things, that the recordkeeping fees charged to participants in the Plans were excessive and that Defendants committed prohibited transactions through subsidizing corporate services with the Plans and by appropriating to themselves interest earned on money as it transferred into and out of participant accounts. Further, the Court held that ABB selected investment options in order to benefit Fidelity and ABB and not because they were in the best interests of the participants in the Plans.

In January, 2010, the case was tried before U.S. District Court Judge Nanette Laughrey over a four week period. On March 31, 2012, the Court entered judgment against Defendants. As part of the judgment, ABB was ordered to pay $35.2 million to compensate the Plans for losses resulting from its violations of federal law by selecting investment options for the Plans based on benefits to ABB and Fidelity and not because they were in the best interests of participants and by permitting Fidelity to charge excessive record keeping fees to the 401(k) Plans. Separately, the Fidelity Defendants were found to have misallocated interest on cash flows into and out of the Plans’ investment options and were ordered to pay an additional $1.7 million, for a total monetary judgment against Defendants of $36.9 million. The Court also issued an injunction requiring Defendants to take certain steps to remedy the fiduciary breaches it found. The injunction requires ABB to “negotiate for a reasonable, market price for the services provided by its record keeper,” to “choose the share class of investments that has the lowest expense ratio,” and, “so long as [ABB] serves as a fiduciary” to the PRISM Plans, precludes ABB from using a “PRISM Plan record keeper to provide corporate services to ABB.” The injunction orders Fidelity not to “transfer float income to any entity other than the Plan, its participants, or its beneficiaries unless expressly permitted to do so by the terms of its agreements with the PRISM Plans.” Plaintiffs have valued part of this nonmonetary relief at $5.9 million over four years and seek for the Class an additional $143,000 in prejudgment interest. Under this valuation, the total benefit to the Class would be approximately $43 million. The Court’s full Order and Judgment are linked on the left hand side of this website.

Defendants are appealing that decision and have asked the Court to stay part of the injunction pending the outcome of that appeal. The outcome of Defendants’ appeal could affect the existence, amount or timing of any judgment. Plan participants, represented by Schlichter, Bogard & Denton of St. Louis, Missouri, have also filed a Motion for Attorneys’ Fees and Costs seeking reimbursement for Class Counsel’s fees and costs of the litigation. Class Counsel have received no payment for any of their time in this case and have advanced all costs and expenses of this case over the last 5 and one-half years. Class Counsel are seeking reimbursement of $14.3 million in fees and $2.2 million in expenses. Plaintiffs contend that federal law requires Defendants to pay $14.3 million of this amount. Defendants oppose this request and argue that the amount they should pay is less. The Court will decide how much of the $14.3 million Defendants will pay. Class Counsel contends that any amounts not paid by Defendants should be paid from the money judgment of $36.9 million. The Court will also determine whether, and in what amount, Class Counsel will be compensated from the money judgment. Plaintiffs also seek compensation from the judgment for three named plaintiffs in the amount of $25,000 each. The Court will decide whether, and in what amount, to award such compensation.

As a class member, if you wish to file an objection to Plaintiffs’ Motion you must do so by writing to: United States Courthouse, 80 Lafayette Street, Jefferson City, Mo, 65101. You are not required to file an objection or do anything else at this time. The deadline for objections is August 8, 2012.

Again, welcome to the case website. To help you better understand the lawsuit, we have links to documents from the case on the left side of this website as well as a link with answers to frequently asked questions.

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