Boeing’s board of directors must face a lawsuit from shareholders over two fatal 737 Max crashes that killed 346 people in less than six months, a US judge has ruled.
Vice chancellor Morgan Zurn ruled Boeing stockholders may pursue some claims against the board, but dismissed others.
Delaware judge Zurn’s ruling said the first of the two fatal 737 Max crashes was a “red flag” about a key safety system known as MCAS “that the board should have heeded but instead ignored.”
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.”
The US Federal Aviation Administration lifted a ban on the new generation aircraft in November after a 20-month review following the fatal crashes in Indonesia in 2018 and Ethiopia in 2019.
Boeing was charged in January by the US Justice Department with 737 Max fraud conspiracy and agreed to a deferred prosecution agreement and settlement worth more than $2.5 billion.
Zurn’s ruling found some evidence submitted by Boeing supported the shareholders’ allegations.
“That the board knowingly fell short is also evident in the board’s public crowing about taking specific actions to monitor safety that it did not actually perform,” the ruling said.
The crashes have cost Boeing some $20 billion in fines, cancelled orders and other costs.