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Court Rules Boeing Board ‘Must’ Face Shareholder Lawsuit over 737MAX Crashes

Court Rules Boeing Board ‘Must’ Face Shareholder Lawsuit over 737MAX Crashes

A U.S. court has ruled that Boeing’s board of directors must face a lawsuit from shareholders over the two fatal 737 MAX crashes that killed 346 people in a six-month period between 2018 and 2019.

In a lengthy summary, Judge Morgan Zurn said the board “publicly lied about if and how it monitored the 737 MAX’s safety.”

Judge Zurn said the first crash – when Indonesian carrier Lion Air flight 610 crashed into the Java Sea 13 minutes after take-off on 29 October, 2018 – was a “red flag” about a key safety system but was “ignored” by the board.

All 189 passengers and crew were killed.

On 10 March, 2019 Ethiopian Airlines Flight 302 crashed six minutes after take-off, killing all 157 people on board.

Following the second crash, all Boeing 737 MAXs were grounded and only received clearance to fly at the beginning of 2021.

Shareholders are ‘victims’

Judge Zurn added: “While it may seem callous in the face of the families’ losses, corporate law recognises another set of victims: Boeing as an enterprise, and its stockholders.

“Stockholders have come to this court claiming directors and officers failed them in overseeing mission-critical airplane safety to protect enterprise and stockholder value.”

Although Boeing paid out $2.5 billion to settle criminal charges claiming it concealed information, the manufacturer is still facing civil lawsuits from the families of the victims.

Following the ruling by Judge Zurn, Boeing said it was “disappointed in the court’s decision to allow the plaintiffs’ case to proceed past this preliminary stage of litigation.

“We will review the opinion closely over the coming days as we consider next steps.”

Malfunctioning Sensor

The root cause of the crashes was traced to malfunctioning piece of software known as the MCAS (Maneuvering Characteristics Augmentation System), intended to make the plane easier to handle.

In both accidents, pilots finally lost control of their plane, resulting in a crash with total loss of aircraft.

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Fionn Davenport is the editor-in-chief of the ITTN group, including ITTN and ITTN Ireland. He's one of Ireland's best-known travel journalists and writers, with nearly 30 years' experience writing guidebooks for Lonely Planet and others.

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