Federal District Court Judge Der-Yeghiayan granted plaintiffs' motion to file an amended complaint in the United Airlines (UAL) ESOP class action. The court rules require that a plaintiff obtain permission before making substantive changes to a complaint.

The original complaint, filed February 28, 2003, represents a class of UAL employees, seeking to recover approximately $2 billion dollars in losses they suffered when United Airlines stock declined as the company descended into bankruptcy.

The most significant change in the amended complaint is the addition of State Street Bank and Trust Company (State Street) as a defendant. The amended complaint claims that State Street breached its fiduciary duties as trustee of the ESOP. The ESOP committee and its members remain defendants, although their liability is limited to coverage provided under any available insurance policy or policies.

The claims against State Street were added as a result of documents Hagens Berman obtained pursuant to a stipulation in the bankruptcy court between the ESOP Plaintiffs, the ESOP Committee, and UAL. As a result of the stipulation, the bankruptcy court entered an order on June 18, 2004 that allowed Plaintiffs' claims to proceed in the district court.

Based on newly obtained documents including the ESOP Committee meeting minutes, the amended complaint alleges the following:

• State Street served as the Trustee to the ESOP, and had fiduciary obligations to the ESOP participants under ERISA.
• "As of the beginning of the Class period [July of 2001], UAL faced imminent bankruptcy; yet, although State Street attended every meeting of the ESOP Committee, State Street never questioned the actions of the ESOP Committee until August 20, 2002. By this time UAL stock had lost most of its value."
• "Even after placing UAL stock on its 'watch list' in February of 2002 due to the Company's precarious state and the risk of bankruptcy, State Street continued to hold and acquire UAL stock and did not question the Committee Members' inaction or even inform the Committee that State Street had placed UAL stock on the watch list and that ERISA mandated an objective assessment as to the continued prudence of maintaining all of the Plan's assets in UAL stock."
• "Significantly, once State Street belatedly informed [ESOP] Committee Members as to the scope of their duties under ERISA and informed them that ERISA required that the Plan requirement of 100% investment in UAL stock must be disregarded when such holdings became imprudent, the Committee Members were quick to appoint State Street as Investment Manager. As State Street recognized, it was at all times under a duty to monitor the prudence of UAL stock as an investment, and to override any orders to buy or hold UAL stock if such order was itself disloyal, imprudent, or otherwise inconsistent with ERISA. Throughout the Class Period, all orders to buy or hold UAL stock were imprudent and contrary to ERISA and should have been overridden by State Street."
• "Regardless of the wording of the ESOP documents, all Defendants were bound by their duties of prudence and loyalty to disregard the Plan's requirements when, as here, following the Plan's requirements was itself disloyal and imprudent. Regardless of any terms of the Plan, all Defendants had a duty under 29 U.S.C. 1104(a)(D) to: (1) cease making purchases of Company stock in the ESOP, and (2) sell all or large portions of the Company stock that was then in the ESOP."