Rhode Island's General Treasurer, James A. Diossa, filed a class-action lawsuit against The Boeing Company on January 30, 2024, accusing the aerospace giant of betraying the trust of the state's pensioners. The lawsuit, filed in a U.S. District Court in Virginia, names Boeing's President and CEO David Calhoun, former President and CEO Dennis Muilenburg, and Chief Financial Officer Brian West as co-defendants.
The legal action comes in the wake of recent safety concerns surrounding Boeing aircraft, including a mid flight incident where a door plug blew out on a Boeing 737 Max 9. Diossa expressed deep concern over the disregard for safety displayed in these events, stating that the lawsuit has the potential to drive changes in Boeing's practices to prioritize passenger safety.
The civil case alleges that Boeing issued false and misleading statements to the market regarding its safety practices. It specifically points to Boeing's assurances to investors that it was focused on safety following the Max plane crashes in 2018 and 2019, which claimed the lives of 346 people.
The lawsuit highlights recent incidents, including the door plug incident on a 737 Max 9 and the discovery of loose bolts on some Max 9 planes by United Airlines and Alaska Airlines. Additionally, a Delta Air Lines Boeing 757 lost a nose wheel before takeoff on January 24, 2024. These events, according to the suit, contributed to a 19.5% drop in Boeing's stock price, falling from $249 per share to $200.52 on January 16.
In response to the safety concerns, the Federal Aviation Administration (FAA) grounded all 737 Max 9 planes for nearly a month and initiated an investigation into Boeing's manufacturing and production lines. The FAA is examining whether Boeing failed to ensure that completed products conformed to approved designs and were safe for flight.
Boeing has taken steps to address these issues, including increased inspections throughout its build process at its Washington state factory and Spirit AeroSystems in Kansas, responsible for 70% of the Max 9 fuselage. The company also suspended production at its Washington state 737 factory on January 25, 2024, to conduct quality improvement sessions, part of a broader initiative across Boeing factories to enhance quality through hands-on training and collaboration.
The lawsuit adds further legal pressure on Boeing as it grapples with safety challenges and seeks to restore confidence in its aircraft. The outcome of the legal proceedings may have significant implications for Boeing's reputation and future safety practices.
