Federal Judge Rejects Boeing-DOJ Settlement

DALLAS — A federal judge has rejected the plea deal between Boeing and the Justice Department (DOJ), citing concerns about oversight of an independent monitor and diversity provisions.

The deal, settled last July, meant to resolve a years-old criminal fraud charge against Boeing for defrauding safety regulators by failing to disclose information about a software system on the 737 MAX planes, would have required Boeing to pay a US$244 million fine and spend three years on probation. 

It would have also mandated an independent monitor oversee Boeing’s compliance with antifraud measures. The deal paved the way for Boeing to move forward under new leadership amid its acquisition of Spirit AeroSystems.

Yesterday, the judge in Texas rejected the settlement, stating it lacked an appropriate plan for selecting and overseeing the monitor and required the parties to consider race when hiring it.

Criticism of the Settlement

While the plea deal avoided a potentially lengthy and damaging trial, it drew criticism from some victims' families who sought harsher punishment. That the settlement amount fell short of the US$24.8 billion sought by the families is an understatement. The DOJ acknowledged this opposition in its court filing.

The families of the victims in the MAX crashes would later file an objection to the plea deal. Their opposition stemmed from a previous statement by Judge O'Connor, who had called Boeing's actions "potentially the deadliest corporate crime in U.S. history."

This settlement marked a major turning point following the two devastating crashes of Boeing's 737 MAX aircraft in 2018 and 2019, which tragically took the lives of 346 people in Indonesia and Ethiopia.

Paul Cassell, an attorney representing the families who lost loved ones in the crashes, said yesterday's ruling showed Judge Reed O’Connor recognized the deal’s "cozy nature" and its failure to focus on accountability and preventing similar incidents.

Want to know more about the Boeing 737 MAX as it compares to its competitors? Check out our explainer here.