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Boeing, Southwest defeat class actions over 737 MAX safety

Stock Markets Nov 21, 2022 04:51PM ET
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© Reuters. FILE PHOTO: Grounded Southwest Airlines Boeing 737 MAX 8 aircraft are shown parked at Victorville Airport in Victorville, California, U.S., March 26, 2019. REUTERS/Mike Blake/File Photo
 
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By Jonathan Stempel

(Reuters) -A U.S. appeals court on Monday threw out class-action lawsuits accusing Boeing (NYSE:BA) Co and Southwest Airlines (NYSE:LUV) Co of covering up a fatal flaw in the design of the Boeing 737 MAX 8 plane, and ordered that the litigation be dismissed.

In a 3-0 decision, the 5th U.S. Circuit Court of Appeals in New Orleans said four classes of passengers who claimed they were overcharged on nearly 200 million Southwest and American Airlines (NASDAQ:AAL) tickets over 18 months could not prove they were harmed, depriving federal courts of jurisdiction.

Brian Dunne, whose law firm represented the plaintiffs, declined to comment. Boeing and Southwest did not immediately respond to requests for comment.

The 737 MAX was grounded worldwide after 346 people died in the October 2018 crash of Lion Air Flight 610 in Indonesia and March 2019 crash of Ethiopian Airlines Flight 302 in Ethiopia.

Passengers accused Southwest, Boeing's launch customer for the MAX 8, of pressuring Boeing into deceiving Federal Aviation Administration (FAA) officials during the testing and certification process, ostensibly to lower pilot training costs.

They also alleged that the companies misled the FAA about a Boeing aircraft stability system that took control of both planes and improperly pushed their noses down.

Passengers said they overpaid for tickets on Southwest and American, which also flew the MAX 8, because demand and prices on the plane's routes would have fallen if the truth had been known.

Circuit Judge Andrew Oldham, however, said the plaintiffs at most complained of a "past risk of physical injury to which they were allegedly exposed because of defendants' fraud," and lacked standing because that risk never materialized.

He also said "if anything, plaintiffs are likely better off financially" because they would have to pay more on other flights had the MAX 8 been taken out of service sooner.

In January 2021, Boeing agreed to pay $2.5 billion to resolve a U.S. Department of Justice criminal probe into the 737 MAX crashes.

The case is Earl et al v Boeing Co et al, 5th U.S. Circuit Court of Appeals, No. 21-40720.

Boeing, Southwest defeat class actions over 737 MAX safety
 

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