Principal Revenue Sharing Suit Focusing on Class Action Issue

September 28, 2007 ( - A federal court lawsuit over the Principal Financial Group's 401(k) revenue sharing arrangements likely will not be heard in an Iowa courtroom until mid-to-late 2008 at the earliest, according to the latest case schedule.

The scheduling decision by Chief U.S. Magistrate Thomas J. Shields of the U.S. District Court for the Southern District of Iowa is the first major development in the case since it was moved from the U.S. District Court for the Southern District of Illinois.

Shields’ timetable on how and when the suit will proceed focused on arguments over whether the matter should be deemed a class action and the deadlines for completing pre-trial discovery information gathering about that issue. Shields’ ordered that all legal papers from both sides on the class action matter be submitted by April 1, 2008, and that any court hearings on the subject be held after that time.

U.S. District Judge David R. Herndon  had ordered the Iowa move at the request of lawyers for the Des Moines-based Principal after they argued it was unfair to force the financial services firm to litigate the case in an Illinois federal courtroom (See Principal Revenue Sharing Suit Gets Moved to Iowa ). 

Plaintiff Joseph Ruppert, vice president of Fairmount Park Inc., which runs the Fairmount Park Racetrack in Collinsville, Illinois near St. Louis, alleged in the suit that Principal’s revenue sharing practices violated the Employee Retirement Income Security Act (ERISA). Ruppert acts as trustee for his company’s 401(k) plan (See Plan Sponsor Sues Principal over 401(k) Fund Revenue Sharing ).

When the suit was filed, Principal spokeswoman Terri Hale declined to comment directly on the litigation, but responded in a statement: “The Principal takes seriously our commitment to our plan sponsor clients and their participants and places the highest priority on providing excellent customer service.”

The case, Joseph Ruppert versus Principal Life Insurance Co., Case 4:07-cv-00344-JAJ, has now been assigned to U.S. District Judge John A. Jarvey.