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A federal judge on Thursday rejected a deal that would have allowed Boeing to plead guilty to a felony conspiracy charge and pay a fine for misleading US regulators about the 737 Max before the two planes crashed, killing 346 people.
The ruling by US District Judge Reed O’Connor in Texas creates uncertainty about the prosecution of the space giant in connection with the development of its best-selling aircraft. Boeing and Ministry of Justice could try to negotiate a new plea deal.
Justice O’Connor’s decision will almost certainly satisfy many relatives of passengers who have died in accidents off the coast Indonesia in Ethiopia less than five months apart. For years, the families have pushed for a public trial, prosecution of former company officials and tougher financial penalties for Boeing.
The deal rejected by the judge would have allowed Boeing to plead guilty to defrauding regulators who approved pilot training requirements for the 737 Max nearly a decade ago. Prosecutors have not alleged that Boeing’s deception played a role in the accidents.
The Department of Justice first charged Boeing in January 2021 with fraud Federal Aviation Administration regulators who approved pilot training requirements for the 737 Max.
The department also announced it would withdraw the charge after three years if the company stayed out of trouble and paid a $2.5 billion settlement — mostly money the company would have paid to airlines anyway because the FAA grounded the 737 Max fleet for 20 months.
The families of the victims are outraged. Judge O’Connor ruled last year that the Justice Department violated the Victims’ Rights Act by failing to tell the relatives it was negotiating with Boeing, but said he had no authority to overturn the deal.
The 2021 deferred prosecution agreement was set to expire when a door plug exploded on a 737 Max earlier this year during Alaska Airlines flight over Oregon. The incident renewed concerns about production quality at Boeing and put the company under intense scrutiny.
After finding that Boeing violated the terms of the 2021 settlement, the Justice Department reopened the prosecution on the conspiracy charge. That led to new negotiations and a plea deal that Judge O’Connor rejected.
In July, Boeing agreed to plead guilty to one felony count of conspiracy to defraud for allegedly deceiving the FAA about how much training pilots would need before flying the Max. Boeing downplayed the new flight control system called MCAS.
Acting on Boeing’s incomplete disclosures, the FAA approved minimal, computer-based training instead of more intensive flight simulator training. Simulator training would increase the cost for airlines to operate the Max and may force some to buy planes from rivals Airbus instead.
Because of Boeing’s actions, airlines and pilots were unaware of MCAS until it was involved in the first accident, in 2018. Java Sea. Despite knowing about the MCAS, Ethiopian Airlines the pilots were unable to control the system and prevent another accident in 2019 Addis Ababa.
Prosecutors told the judge that the conspiracy charge was the most difficult they could prove against Boeing. Most importantly, the Justice Department said that if the case goes to trial, it will present no evidence that Boeing’s deception caused the accidents.
The plea agreement included a fine of up to $487.2 million, but would have given Boeing credit for $243.6 million in fines it paid as part of a settlement in 2021. Under the deal, Boeing, based in Arlington, Virginiait would also invest $455 million in compliance and security programs, and be placed on probation and overseen by an independent monitor for three years.
At the Oct. 11 hearing, Boeing attorney Ben Hatch defended the plea deal, saying Boeing is a “pillar of the national economy and national defense” and needs to know its punishment before agreeing to plead guilty.
The lawyer’s argument stunned the relatives of the victims, who were in the courtroom.
“Boeing is too important to the economy – they’re too big to jail. That’s what he’s saying,” said Michael Stumo, whose daughter Samya was killed in the second crash. “It allows them to kill people without consequence because they’re too big and because their shareholders won’t like it.”