Boeing 2011 Annual Report Download - page 114

agreements, and constituted retaliation. The case was brought in 2006 as a class action on behalf of
individuals not hired by Spirit. During the second quarter of 2010, the court granted summary judgment
in favor of Boeing and Spirit on all class action claims. Following certain procedural motions, plaintiffs
filed a notice of appeal to the Tenth Circuit Court of Appeals on August 10, 2011, and are seeking to
stay all remaining individual claims in the district court pending resolution of the appeal. Plaintiffs’
appellate brief was filed on November 14, 2011. Boeing’s appellate brief was filed on January 20,
2012.
The second action, initiated in 2007, alleges collective bargaining agreement breaches and ERISA
violations in connection with alleged failures to provide benefits to certain former employees of the
Wichita facility. Written discovery closed by joint stipulation of the parties on June 6, 2011. Depositions
concluded on August 18, 2011. Plaintiffs’ partial motion for summary judgment was filed on
December 9, 2011. Boeing’s opposition and dispositive motions are due on February 10, 2012. Spirit
has agreed to indemnify Boeing for any and all losses in the first action, with the exception of claims
arising from employment actions prior to January 1, 2005. While Spirit has acknowledged a limited
indemnification obligation in the second action, we believe that Spirit is obligated to indemnify Boeing
for any and all losses in the second action.
On October 13, 2006, we were named as a defendant in a lawsuit filed in the U.S. District Court for the
Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and
beneficiaries in The Boeing Company Voluntary Investment Plan (the VIP), alleged that fees and
expenses incurred by the VIP were and are unreasonable and excessive, not incurred solely for the
benefit of the VIP and its participants, and were undisclosed to participants. The plaintiffs further
alleged that defendants breached their fiduciary duties in violation of §502(a)(2) of ERISA, and sought
injunctive and equitable relief pursuant to §502(a)(3) of ERISA. During the first quarter of 2010, the
Seventh Circuit Court of Appeals granted a stay of trial proceedings in the district court pending
resolution of an appeal made by Boeing in 2008 to the case’s class certification order. On January 21,
2011, the Seventh Circuit reversed the district court’s class certification order and decertified the class.
The Seventh Circuit remanded the case to the district court for further proceedings. On March 2, 2011,
plaintiffs filed an amended motion for class certification and a supplemental motion on August 7, 2011.
Boeing’s opposition to class certification was filed on September 6, 2011. Plaintiffs’ reply brief in
support of class certification was filed on September 27, 2011. This issue is fully briefed and awaits
district court determination. Boeing’s motions for summary judgment based on ERISA’s statute of
repose and for summary judgment on the merits were both filed on December 21, 2011. The Company
cannot reasonably estimate the range of loss, if any, that may result from this matter given the current
procedural status of the litigation.
BSSI/ICO Litigation
On August 16, 2004, our wholly owned subsidiary, Boeing Satellite Systems International, Inc. (BSSI)
filed a complaint for declaratory relief against ICO Global Communications (Operations), Ltd. (ICO)
in Los Angeles County Superior Court seeking a declaration that ICO’s prior termination of two
contracts for convenience extinguished all claims between the parties. On September 16, 2004, ICO
filed a cross-complaint alleging breach of contract, economic duress, fraud, unfair competition, and
other claims. ICO added The Boeing Company as a defendant in October 2005 to some of these
claims and for interference with contract and misappropriation of trade secrets. On January 13, 2006,
BSSI filed a cross-complaint against ICO, ICO Global Communications (Holdings) Limited (ICO
Holdings), ICO’s parent, and Eagle River Investments, LLC, parent of both ICO and ICO Holdings,
alleging fraud and other claims. The trial commenced on June 19, 2008, with ICO seeking to recover
approximately $2,000 in damages, including all monies paid to BSSI and Boeing Launch Services, plus
punitive damages and other unspecified damages and relief.
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