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Boeing Will Pay $2.5 Billion to Settle 737 MAX Investigation

— January 9, 2021

Attorneys for the family members of MAX crashes say the Department of Justice’s settlement scarcely amounts to a fraction of Boeing’s annual revenue.

Boeing will pay $2.5 billion to settle Department of Justice allegations that the aerospace company concealed information about its 737 MAX planes.

In court, federal prosecutors claimed that Boeing “knowingly and willfully” conspired to defraud the United States government by undermining the Federal Aviation Authority’s ability to evaluate the 737 MAX.

According to Reuters, Boeing later admitted that two of its 737 MAX technical pilots had “deceived” the FAA about the capabilities and shortcomings of the MAX’s “Maneuvering Characteristics Augmentation System,” or MCAS.

MCAS software was implicated in two MAX-related crashes.

Reuters notes that the $2.51 billion fine consists of:

  • A $243.6 million criminal penalty
  • A $500 million fund for crash victims
  • A further $1.77 billion for airlines which have purchased 737 MAX aircraft and suffered losses after governments around he world grounded the plane

Acting Assistant Attorney General David P. Burns said the Department of Justice’s investigation into Boeing revealed the extent of the company’s deceit.

Several large aircraft parked in a lot.
Grounded Boeing 737 MAX aircraft at Boeing Field in Seattle, Washington. Photo by SounderBruce, courtesy of CC BY-SA 4.0

“The tragic crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 exposed fraudulent and deceptive conduct by employees of one of the world’s leading commercial airplane manufacturers,” Burns said in a statement. “Boeing’s employees chose the path of profit over candor by concealing material information from the FAA concerning the operation of its 737 MAX airplane and engaging in an effort to cover up their deception.”

As LegalReader’s reported before, the 737 MAX came to international attention after two separate airlines—Ethiopian Airlines and Lion Air–suffered mass-casualty crashes. Both incidents involved 737 MAX airplanes. Later investigations showed that the pilots lost control of their respective aircrafts following software malfunctions, which overrode the planes’ autopilot.

In both cases, the MCAS sensors designed to gauge the 737 MAX’s angle of attack registered incorrect information. Since the planes’ internal computers were receiving inputs suggesting the AoA was precariously high, the autopilot attempted to repeatedly correct by repositioning each aircrafts’ nose towards the ground so forcefully the actual pilots could not level the yoke.

The pilots were unable to regain control of their airplanes, which were both driven into the ground by MCAS.

The two crashes claimed a total of 346 lives. Both flights went down mere minutes after take-off.

While the families of victims may claim money from the fund established by the Department of Justice settlement, some advocates say Boeing’s escaped any real, practical penalty.

“This settlement amount is a slap on the wrist and an insult to the 346 victims who died as a result of corporate greed,” said U.S. Rep. Peter DeFazio, an Oregon Democrat whose congressional committee sponsored and passed a law giving the FAA more power in certifying aircraft models and revisions. “Not only is the dollar amount of the settlement only a mere fraction of Boeing’s annual revenue, the settlement sidesteps any real accountability in terms of criminal charges.”

Attorneys for the victims’ families say the Justice settlement will have no impact on civil lawsuits now pending against Boeing.

“This agreement, including the ‘crash-victim beneficiaries fund,’ has no bearing on the pending civil litigation against Boeing, which we plan to prosecute fully to ensure the families receive the justice they deserve,” they said.


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