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Boeing Reaches First Settlement with 737 MAX Victims

Nov. 11, 2021
The jet builder accepts responsibility for the 2019 crash of an Ethiopian Airlines 737 MAX, avoiding punitive damages – and also settles shareholders claim against directors.

Boeing Co. entered into an agreement to settle with the families of 157 passengers and crew members killed in the March 2019 crash of an Ethiopian Airlines flight, the second of two Boeing 737 MAX crashes that led to a 20-month-long grounding of the narrow-body jet series. No financial terms have been revealed, but Boeing agreed to acknowledge responsibility for the crash and pay compensatory damages.

After the U.S. Federal Aviation Administration grounded the 737 MAX Boeing worked with FAA and safety authorities elsewhere in the world to determine and correct the cause of the crashes, which was determined to be the Maneuvering Characteristics Augmentation Systems (MCAS) software that prevented pilots from overriding automated responses to faulty data about engine stalling. Boeing redesigned the MCAS, leading FAA to recertify the air-worthiness of the 737 MAX in November 2020.

The process of reviewing the two crashes and revising the MCAS revealed allegations that Boeing overlooked evidence of potential errors during the development of the flight-control software, as well as charges that the FAA deferred too much to Boeing’s pressure to certify the then-new 737 in 2017.

The announced agreement does not address any claims that may arise from the first 737 MAX incident in October 2018, when a Lion Air jet crashed in Malaysia killing 189 passengers and crew members.

The Ethiopian Airlines settlement will mean that Boeing is able to address damages in a U.S. court. The plaintiffs agreed not to pursue punitive damages against Boeing.

Earlier, current and former Boeing directors have reached a proposed $237.5-million settlement with shareholders suing the company over the board's safety oversight of the 737 MAX series. Reportedly, it would be the largest monetary recovery for a lawsuit filed in Delaware over allegations that directors failed to protect shareholders against the risk of harm.

The proposed agreement will require Boeing to add a new board member with aviation/aerospace, engineering, or product safety oversight expertise.

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