(Reuters) – A Delaware judge ruled Tuesday that Boeing's board must face a lawsuit filed by shareholders over two deadly 737 MAX crashes that killed 346 people in less than six months.
Vice Chancellor Morgan Zurn ruled that Boeing shareholders were pursuing certain allegations against the board but dismissed others.
Judge Zurn's judgment in the Chancellery Court said that the first of the two fatal 737 MAX crashes was a "red flag" about an important safety system called MCAS "that the board should have obeyed but instead ignored."
Boeing said late on Tuesday that it was "disappointed with the court's decision to allow the plaintiffs to proceed after this initial stage of disputes. We will examine the opinion carefully in the coming days as we consider the next step."
737 MAX in November after a 20-month review following the fatal crashes of 2018 and 2019. In January, Boeing was accused by the Department of Justice of 737 MAX conspiracy to commit fraud and agreed to a deferred prosecution agreement and settlement worth more than $ 2.5 billion.
Judge Zurn's ruling found some evidence from Boeing that supported the shareholders' accusations. "That the board deliberately failed is also clear in the board's general about taking "measures to monitor security that it did not actually carry out," the verdict said.
In a lengthy summary of shareholders' cases, Judge Zurn said the board "publicly lied about and how it oversaw the safety of the 737 MAX."
The statement also quoted comments from Dave Calhoun, then CEO of Boeing, who became Boeing's CEO in January 2020 after the board fired CEO Dennis Muilenburg.  It quoted Calhoun's comments that "the board had" been notified as a board in general "after the Lion Air crash and met" very, very quickly "thereafter."
It added that after the second crash. of an Ethiopian Airlines 737 MAX in March 2019, Calhoun represented the board meeting within 24 hours of the crash to discuss any basic 737 MAX.
"Each of Calhoun's submissions was false," said Judge Zurn.  The crashes cost Boeing about $ 20 billion.
Brian Quinn, a professor at Boston College Law School, said the verdict paves the way for further discovery and possibly a trial, although he considered it highly unlikely. where the board tells its lawyers I do not want to go to trial. You have to pay them whatever it takes and I as a director cannot accept responsibility ", he said.
In that scenario, the director's insurance would probably pay for all settlements, he said.