Boeing Investors Granted Class Action Status Over 737 MAX Safety Concerns

• The class action stems from crashes that killed 189 people in a Lion Air incident (October 2018) and 157 people in an Ethiopian Airlines crash (March 2019)
• Boeing previously paid over $2.5 billion in January 2021 to settle a U.S. Department of Justice criminal charge for conspiring to defraud the FAA about the 737 MAX's safety
• The class period ends when the market learned that Boeing's chief technical pilot expressed concern in 2016 that an automated system on the plane was 'running rampant'

Summary: Boeing Investors Granted Class Action Status Over 737 MAX Safety Concerns

Key Development:

U.S. District Judge Franklin Valderrama in Chicago certified a class action lawsuit against Boeing (BA.N) on March 17, allowing investors to collectively sue the company for allegedly concealing safety deficiencies in its 737 MAX aircraft prior to two fatal crashes.

Fatal Incidents:

• Lion Air crash: October 2018, 189 fatalities
• Ethiopian Airlines crash: March 2019, 157 fatalities
• Total deaths: 346 people

Financial Impact:

Boeing previously paid $2.5 billion in January 2021 to settle criminal charges with the U.S. Department of Justice for conspiring to defraud the FAA regarding MAX safety.

Investors Involved:

The class action includes investors in Boeing and competitor Airbus (AIR.PA), whose A320 series competes directly with the 737 MAX. Plaintiffs are represented by lawyer Salvatore Graziano.

Legal Significance:

Judge Valderrama determined there are common means to measure damages across the investor class. Class action status enables greater recoveries at lower costs compared to individual lawsuits.

Timeline Details:

The class period concludes when markets learned that Boeing's chief technical pilot Mark Forkner expressed concerns in 2016 about an automated system "running rampant" on the aircraft.

Current Context:

Boeing faces ongoing scrutiny following a recent door plug incident on an Alaska Airlines 737 MAX 9. The Arlington, Virginia-based company and its lawyers did not immediately respond to requests for comment.

Market Implications:

This certification increases Boeing's legal exposure and potential financial liability to shareholders who suffered losses due to the safety crisis and subsequent grounding of the 737 MAX fleet.