Boeing 2006 Annual Report Download - page 77

The Boeing Company and Subsidiaries 75
Notes to Consolidated Financial Statements
stayed at the request of the parties pending closure of
United Launch Alliance. On December 13, 2006, the court,
upon a motion from the parties, ordered a dismissal with
prejudice of all claims and counterclaims.
Employment and Benefits Litigation
We are a defendant in three employment discrimination
class actions. In the Williams class action, which was filed on
June 8, 1998 in the U.S. District Court for the Western District
of Washington (alleging race discrimination), we prevailed in a
jury trial in December 2005, but plaintiffs appealed the pre-trial
dismissal of compensation claims in November 2005. In the
Calender class action, which was filed January 25, 2005 in
the U.S. Northern District of Illinois (a spin-off from Williams
alleging race discrimination), plaintiffs dropped their promotions
claim on June 6, 2006 and put their compensation claims
on hold pending the outcome of the Williams appeal. In the
Anderson class action, which was filed March 22, 2002 in
the U.S. District Court for the Northern District of Oklahoma
(alleging gender discrimination), the class claims were dis-
missed on October 18, 2006, and no appeal was taken.
In addition, on March 2, 2006, we were served with a complaint
filed in the U. S. District Court for the District of Kansas, alleging
that hiring decisions made by Spirit Aerospace near the time
of Boeing’s sale of the Wichita facility were tainted by age
discrimination. The case is brought as a class action on behalf
of individuals not hired by Spirit. Pursuant to an indemnity
provision in the Asset Purchase Agreement, Spirit has agreed
to defend and indemnify us.
On June 23, 2006, two employees and two former employees
of Boeing filed a purported class action lawsuit in the
U.S. District Court for the Southern District of Illinois against
Boeing, McDonnell Douglas Corporation and the Pension Value
Plan for Employees of The Boeing Company (the “Plan”) on
behalf of themselves and similarly situated participants in the
Plan. The plaintiffs allege that as of January 1, 1999 and all
times thereafter, the Plan’s benefit formula used to compute the
accrued benefit violates the accrual rules of the Employment
Retirement Income Security Act and that plaintiffs are entitled to
a recalculation of their benefits along with other equitable relief.
We believe the allegations claimed by plaintiffs lack merit and
have filed a motion to dismiss all claims. It is not possible, at
this, time to determine whether an adverse outcome would
have a material adverse effect on our financial position.
On September 13, 2006, two UAW Local 1069 retirees filed
a class action lawsuit in the Middle District of Tennessee
alleging that recently announced changes to medical plans for
retirees of UAW Local 1069 constituted a breach of collective
bargaining agreements under §301 of the Labor-Management
Relations Act and §502(a)(1)(B) of ERISA. On September 15,
2006, Boeing filed a lawsuit in the Northern District of Illinois
against the International UAW and two retiree medical plan
participants seeking a declaratory judgment confirming that the
Company has the legal right to make changes to these medical
benefits. It is not possible, at this time, to determine whether
an adverse outcome would have a material adverse effect on
our financial position.
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 “Plan”), allege that fees and
expenses incurred by the Plan were and are unreasonable and
excessive, not incurred solely for the benefit of the Plan and its
participants, and undisclosed to participants. The plaintiffs
further allege that defendants breached their fiduciary duties in
violation of Section 502(a)(2) of ERISA, and seek injunctive and
equitable relief pursuant to Section 502(a)(3) of ERISA. It is not
possible to determine, at this time, whether an adverse out-
come in this matter would have a material adverse impact on
our financial position.
BSSI/ICO Litigation
On August 16, 2004, 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. BSSI’s suit seeks a declaration that
ICO’s prior termination of two contracts for convenience extin-
guished all claims between the parties. On September 16, 2004,
ICO filed a cross-complaint alleging breach of contract, and
other claims, and seeking recovery of all amounts paid
to BSSI under the contracts, which are alleged to be approxi-
mately $2,000; ICO added Boeing to the suit as a defendant
approximately one year later. 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. Trial has been set for
September 2007. We believe that ICO’s claims lack merit and
intend to aggressively pursue our claims.
BSSI/Thuraya Litigation
On September 10, 2004, a group of insurance underwriters
for Thuraya Satellite Telecommunications (Thuraya) requested
arbitration before the International Chamber of Commerce (ICC)
against BSSI. The Request for Arbitration alleges that BSSI
breached its contract with Thuraya for sale of a model 702
satellite that experienced power loss anomalies. The claimants
seek approximately $199 (plus claims of interest, costs and fees),
consisting of insurance payments made to Thuraya, and they
further reserved the right to seek an additional $38 currently in
dispute between Thuraya and some insurers. Thuraya has
reserved its rights to seek uninsured losses that could increase
the total amount disputed to $365. We believe these claims
lack merit and intend to vigorously defend against them.