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Boeing 737-7 MAX at the 2018 Farnborough International Airshow.

DOJ Backs 737 MAX Liability Settlement

Feb. 8, 2022
Relatives of crash victims say the $2.5-billion penalty and agreement denied them the opportunity to press Boeing for compensation.

The U.S. Dept. of Justice is standing by a $2.5-billion deferred prosecution agreement (DPA) it reached with Boeing Corp. last year, regarding the OEM’s role in misleading federal regulators about flight-safety risks of the 737 MAX aircraft. The DOJ asked a federal court in Texas to reject an effort by relatives of people killed in two crashes of 737 MAX jets, who claim that the government cut them out of the chance to settle with Boeing.

The families are asking the federal court to rescind Boeing’s shield from criminal prosecution.

In early 2021, Boeing agreed to pay the $2.5-billion fine to settle a criminal charge brought by DoJ alleging a conspiracy to defraud the Federal Aviation Administration’s Aircraft Evaluation Group (AEG) in 2017, when the FAA initially certified the 737 MAX aircraft.

After a 20-month grounding and investigation of the cause of the crashes, and a fix to the flight-control software identified as the cause in both cases, FAA recertified the twin-engine narrow-body 737 MAX.

Federal investigators also examined how the defective software was approved, which led to DOJ issuing the conspiracy charge against Boeing.

Boeing agreed to pay a criminal monetary penalty of $243.6 million, compensate 737 MAX customers (airlines) with a total of $1.77 billion, and establish a $500-million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of 346 passengers killed in two crashes of 737 MAX, in October 2018 and March 2019.

Boeing admitted — through two of its 737 MAX Flight Technical Pilots — that it deceived the FAA AEG about the Maneuvering Characteristics Augmentation System (MCAS), part of the 737 MAX flight-control program identified as the cause of both crashes. “Because of their deception, a key document published by the FAA AEG lacked information about MCAS, and in turn, airplane manuals and pilot-training materials for U.S.-based airlines lacked information about MCAS,” DOJ summarized in January 2021.

Later, in November 2021, Boeing agreed to settle with the families of 157 passengers and crew members killed in the March 2019 crash of an Ethiopian Airlines flight, acknowledging responsibility for the crash and agreeing to pay unspecified compensatory damages.

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