Federal Judge Approves Boeing Shareholder Lawsuit Over 737 MAX Crashes

A Chicago federal judge has given the green light for Boeing shareholders to proceed with a class-action lawsuit over the company's handling of 737 MAX safety issues. The lawsuit stems from two deadly crashes in 2018 and 2019 that killed 346 people and allegations that Boeing hid safety problems from investors.

A federal judge in Chicago has given approval for Boeing shareholders to move forward with a class-action lawsuit against the aircraft manufacturer over alleged safety cover-ups involving its 737 MAX aircraft.

U.S. District Judge Franklin Valderrama ruled Monday that investors who held Boeing shares from November 7, 2018, through October 18, 2019, can proceed as a unified group in their legal action. The judge determined the shareholders successfully showed they could measure potential damages using common methods.

The lawsuit centers on accusations that Boeing deliberately hid safety problems with the 737 MAX before two fatal accidents that claimed 346 lives. A Lion Air flight crashed in October 2018, killing 189 passengers and crew, followed by an Ethiopian Airlines disaster in March 2019 that took 157 lives.

According to the legal filing, shareholders allege Boeing rushed the 737 MAX’s development process, dismissed safety concerns raised by its own employees, and provided misleading information to federal aviation regulators. The plaintiffs claim the company took these actions due to competitive pressure from Airbus and its A320 aircraft series.

The pension funds and private investors leading the case had hoped to extend their lawsuit’s timeframe until December 16, 2019, when Boeing temporarily halted MAX production. However, the judge concluded the appropriate end date was October 18, 2019, when financial markets learned that Boeing’s chief technical pilot Mark Forkner had warned in 2016 that an automated flight system was “running rampant.”

Boeing, headquartered in Arlington, Virginia, is also dealing with another shareholder lawsuit in federal court in Alexandria, Virginia. That separate case relates to claims the company misrepresented its safety commitments before a cabin panel blew out of an Alaska Airlines 737 MAX 9 during flight in January 2024.

Representatives for Boeing and the company’s legal team did not provide immediate responses to requests for comment Tuesday. Salvatore Graziano, representing the shareholders, also declined to comment on the ruling.

This legal development comes after Boeing previously agreed to pay over $2.5 billion in January 2021 to settle federal criminal charges. The Department of Justice had accused the company of conspiring to deceive the Federal Aviation Administration about the 737 MAX’s safety systems.

Class-action lawsuits typically offer shareholders the potential for larger financial recoveries while reducing legal costs compared to individual cases filed separately.