US: 737 MAX deal provided ‘more compensation than required’

In today’s courts filings, the United States Department of Justice (US DOJ) asked a federal court in Texas to reject a bid by relatives of the people killed in two Boeing 737 MAX crashes to strike down the part of the last year’s deal between US Government and Boeing, that shields the aircraft manufacturer from criminal prosecution.

The US Justice Department is opposing a claim by the victims’ families that allege that US government violated their legal rights when it reached a $2.5 billion settlement with the Boeing in January of 2021 to resolve a criminal charge against the plane maker.

The families of the 737 MAX crash victims argue that government lawyers violated a crime-victims law by not telling them that the US government was negotiating a deal with Boeing that would allow the plane manufacturer to avoid prosecution. The families want a court to strike down the part of the settlement that protects Boeing from criminal prosecution.

In today’s filing, the Department of Justice told the court, that the family members are not crime victims. Department lawyers also said the settlement with Boeing over 737 MAX crashes included financial compensation above what the law required.

The deal allowed Boeing to avoid prosecution, and included a fine of $243.6 million, compensation to airlines of $1.77 billion and a $500 million fund for crash victims over fraud conspiracy charges related to the plane’s flawed design.

The deal, reached in January 2021, at the end of former President Donald Trump’s administration, capped a 21-month government investigation into the design and development of the 737 MAX following the two deadly crashes, in Indonesia in 2018 and Ethiopia in 2019. Total of 346 people have lost their lives in two disasters.

According to the US Department of Justice, $471 million – 94% of the $500 million from the crash victims fund – has been disbursed to relatives of 326 of the 346 crash victims.

In the filing, the department explained its decision not to take Boeing to a trial on a criminal charge of conspiring to defraud the Federal Aviation Administration (FAA), the agency that regulates plane manufacturers and evaluated their aircraft.

“There was no doubt that Boeing had conspired to defraud the federal government when it deceived the FAA Aircraft Evaluation Group,” the DOJ said in its filing.

“The government’s investigation, however, did not produce evidence that it believed would allow it to prove beyond a reasonable doubt what factors had caused the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302,” the filing said, referring to the two fatal flights.

A lawyer for the families, condemned the DOJ’s position that relatives of those killed in the crashes do not qualify as “crime victims” under US federal law.

“The Department of Justice’s claim that the families are not the ‘victims’ of Boeing’s crimes is unconscionable and unsupportable,” the lawyer said in a statement.

The Lion Air and Ethiopian Airlines disasters that cost Boeing some $20 billion and led to a 20-month worldwide grounding of the 737 MAX aircraft that ended in 2020, prompted the US Congress to pass legislation reforming new aircraft certification.