Fee Suit against Lockheed Martin to Move Forward

The U.S. District Court for the Southern District of Illinois refused to toss out allegations that Lockheed Martin Corporation breached its fiduciary duty by charging its 401(k) plan participants excessive and unreasonable fees.

Plaintiffs allege that the fees paid by the Lockheed Martin Corporation Salaried Savings Plan and the Lockheed Martin Corporation Hourly Savings Plan “were unreasonable and excessive; not incurred solely for the benefit of the plans and their participants; and undisclosed to participants.”

The original 40-page complaint against Lockheed also alleges that revenue sharing deals with service providers compromised the assets of the plans.

Lockheed had asked that the complaint be thrown out on grounds it was a “protracted narrative with convoluted, redundant and unnecessary allegations.” It also asked that the court strike the parts of the complaint that are extraneous. Lockheed said the complaint violates Federal Rule of Civil Procedure 8(a)(2), which requires a “short and plain statement of the claim.”

However, the district court disagreed. U.S. District Judge Michael Reagan wrote in the 5-page opinion that the plaintiffs’ pleading “is not necessarily a model of draftsmanship; however, it adequately performs its function of making a “showing’ of entitlement to relief and giving notice to Lockheed of the relevant facts and the legal basis of Plaintiffs’ claims.”

Reagan also rejected Lockheed’s request that the court strike the “redundant, immaterial, impertinent, or scandalous matter” from the complaint, arguing that taking the time to do that would “merely serve to delay this litigation …”

U.S. District Judge John Shabaz of the U.S. District Court for the Western District of Wisconsin was not as forgiving of the presentation of a fee-suit complaint against Deere & Co. and two Fidelity Investment units. Shabaz called the complaint in that case – that also included revenue sharing allegations – a “rambling 38-page collection long on legal argument, public policy rhetoric, and repetition, but vague in its allegations of facts which might be relevant to the claims alleged.” (See Deere and Fidelity Fee Lawsuit Thrown Out).

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