Echoing in Eternity

On Thursday, 19 January 2023, a U.S. federal judge in Texas lifted immunity from criminal prosecution granted to Boeing by the U.S. Justice Department as part of a deferred prosecution agreement struck in the wake of fraud conspiracy charges deriving of allegations that Boeing’s management had opted to deliver 737 MAX narrow-body airliners to customers despite warnings from company engineers that the aircraft’s design was inherently flawed.

U.S. District Court Judge Reed O'Connor ordered Boeing to send a representative to his Fort Worth courtroom on 26 January to hear the reinstated felony charges and respond to such.

Judge O’Connor’s ruling followed objections set forth by family members of persons killed in two high-profile, 2019 accidents involving 737 MAX jets operating as Lion Air Flight 610 and Ethiopian Airlines Flight 302. The bereaved families petitioned Judge O’Connor to rescind Boeing’s immunity from criminal prosecution, arguing that the Justice Department had "lied and violated their rights.” The families collectively accused the U.S. federal government of cutting a secret deal with Boeing.

In 2022, Judge O'Connor ruled that the family members of parties killed in the Lion Air and Ethiopian Airlines 737 MAX accidents are crime victims under U.S. federal law, and should, therefore, have been consulted prior to the Justice Department agreeing to a deal under which Boeing paid $2.5-billion to avoid criminal prosecution on charges of defrauding federal regulators tasked with granting type approval to the 737-MAX.

The majority of the $2.5-billion settlement was allocated to airlines as compensation for loss of revenues incurred subsequent the 737 MAX’s worldwide grounding. Boeing further agreed, however, to pay a $243.6-million fine and create a $500-million fund to compensate victims’ families.

Boeing and the U.S. Justice Department vehemently oppose the re-opening of the 737-MAX settlement. In a November 2022 court filing, the Justice Department stated that doing so "would impose serious hardships on the parties and the many victims who have received compensation."

Boeing echoed the Justice Department’s sentiment, asserting that any effort to reopen the agreement was "unprecedented, unworkable, and inequitable."

In September 2022, Boeing agreed to pay $200-million to settle civil charges brought by the Securities and Exchange Commission which alleged the company had misled investors about the 737 MAX’s soundness and profitability.

In October 2022, Polish national airline LOT petitioned Judge O'Connor to declare it a crime victim in the 737 MAX criminal case. If approved, the petition could qualify the airline for significant compensation.

FMI: www.justice.gov