Last January, Boeing (NYSE: BA) agreed to pay $2.5 billion to the United States Justice Department to resolve criminal charges for its efforts to defraud the Federal Aviation Administration (FAA) regarding the safety of its Boeing 737 Max. Now, a judge has ruled that families of the 346 passengers killed in two deadly 737 crashes can challenge that agreement.
In 2018 and 2019, two 737 Max aircraft crashed due to issues with the plane's design, issues that Boeing allegedly knew about and hid from regulators.
"Now we get a chance to go in front of the judge to say the remedy for this is to throw out this rotten deal and try to get Boeing the corporation criminally prosecuted and its leadership criminally prosecuted for its crimes that led to the deaths of 346 people," said former federal judge Paul Cassell, one of the attorneys representing victims' relatives.
In his ruling allowing families to challenge Boeing's deferred prosecution deal, Judge Reed O'Connor strongly opposed the agreement made between the DOJ and Boeing, saying that the victims of the crashes qualify as "crime victims" under the Crime Victim's Rights Act.
"The court finds that the tragic loss of life that resulted from the two airplane crashes was a reasonably foreseeable consequence of Boeing's conspiracy to defraud the United States," O'Connor wrote, adding that the families "have established adequate direct causal connection between Boeing's criminal conspiracy and the resulting crashes."
The deferred prosecution agreement blocked any future criminal charges being brought against the aviation company for its FAA fraud, and the deal received immediate, heated pushback from victims' family members and advocates seeking to have it overturned.
"Families like mine are the true victims of Boeing's criminal misconduct, and our views should have been considered before the government gave them a sweetheart deal," Naoise Connolly Ryan, the widow of crash victim Mick Ryan, said in a statement.
"The government deliberately concealed its agreement with Boeing from us - the victims' families - and provided complete immunity to the company responsible for our loved ones' deaths," Ryan said.
As a part of its deal with the DOJ, Boeing set up a $500 million fund to compensate families of victims, along with $244 million in additional fines and $1.77 billion in compensation to airlines. Boeing has also paid $200 million in fines to the Securities and Exchange Commission for misleading investors about the safety of the 737 Max.
While the judge's ruling opens the door for victims' families to challenge the deferred prosecution agreement, the ruling itself doesn't actually overturn that agreement.