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Compliance July 12, 2007
Principal Suit Transfer Order Postponed
July 12, 2007 (PLANSPONSOR.com) - A federal judge in
Illinois has put on hold plans to move the federal court
lawsuit against the Principal Financial Group over its 401(k)
revenue sharing arrangements to Iowa to allow plaintiffs'
lawyers to mount an appeal.
Reported by Fred Schneyer
A recent order signed by U.S. District Judge David R. Herndon of the U.S. District Court for the Southern District of Illinois put in place a stay of Herndon’s June 2007 order transferring the case to the U.S. District Court for the Southern District of Iowa in Des Moines for further proceedings.
Herndon’s latest order comes at the request of attorneyStephen M. Tillery who represents Joseph Ruppert, vice president of Fairmount Park Inc., which runs the Fairmount Park Racetrack in Collinsville, Illinois near St. Louis. Ruppert 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 ).
Herndon had made the move at the request of lawyers for the Des Moines-based Principal after they argued that 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 ).
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In agreeing to give Ruppert’s lawyers time to appeal the Iowa transfer order to the 7 th U.S. Circuit Court of Appeals, the court also turned down a request to reconsider the move decision.