A federal judge allows a class action against Boeing for concealing 737 MAX safety flaws linked to two deadly crashes, impacting shareholders.
A federal judge has certified a shareholder class action accusing Boeing of concealing safety flaws in its 737 MAX aircraft before two crashes killed 346 people in 2018 and 2019, reports Reuters.
US District Judge Franklin Valderrama in Chicago ruled that shareholders who owned Boeing stock between November 7, 2018, and October 18, 2019, may sue as a group. The class period ended two months earlier than investors sought, but the judge stated they demonstrated a common way to measure damages.
The shareholders, led by pension funds and private investors, claim that Boeing rushed the development of the 737 MAX, ignored employee warnings, and misled regulators to protect its market share against Airbus. They filed the lawsuit following the Lion Air crash in October 2018, which killed 189 people, and the Ethiopian Airlines crash in March 2019, which resulted in 157 fatalities.
Boeing is also facing another class action in Virginia, alleging that it overstated its commitment to safety prior to a January 2024 cabin panel blowout on an Alaska Airlines 737 MAX 9. Neither Boeing nor its lawyers have commented on the latest ruling.
Shareholders had sought to extend the class period to December 16, 2019, when Boeing suspended MAX production; however, the judge set the end date earlier, coinciding with when the market became aware of concerns raised by the plane's chief technical pilot.
In January 2021, Boeing agreed to pay more than US$2.5 billion to resolve a US Department of Justice criminal charge that it conspired to defraud the Federal Aviation Administration regarding the MAX's safety.
