A federal appeals court has rejected a class-action lawsuit against Boeing and Southwest Airlines that accused the companies of putting 737 Max passengers in harm’s way and covering up known dangers to the flying public.
The case was one of the most significant consumer actions over the 737 Max crisis after the crashes of two jets in Indonesia and Ethiopia that killed 346 people and set off a worldwide investigation into the airworthiness of the Boeing plane.
The lawsuit was originally filed in 2019 after the 737 Max was grounded as details began to emerge that Boeing had long known about issues with the software system known as MCAS that was blamed for steering the planes into the ground. The lawsuit claimed that Dallas-based Southwest, Boeing’s largest 737 Max customer, was aware of the problems and hid the dangers from the public.
The plaintiffs argued that consumers were duped into flying on unsafe airplanes.
“The actual prices of the tickets that were purchased as a result of the misrepresentations by Southwest and Boeing about the safety of the MAX 8 and MAX Series Aircraft were significantly higher than the value of those tickets, which for many, if not most, passengers was zero,” the suit argued.
At the time of the suit, Southwest said the claims that the airline knew of 737 Max flaws were “completely without merit.”
But in a 3-0 decision, the Fifth Circuit Court of Appeals reversed the case’s class-action status and ordered it to be sent back to the lower court “with instructions to dismiss the case for lack of jurisdiction.”
“In sum, plaintiffs have not plausibly alleged any concrete injury,” appeals court judge Andrew S. Oldham wrote in the opinion. “They concededly have suffered no physical harm. They have offered no plausible theory of economic harm.”
Boeing was forced to pay $2.5 billion in a controversial plea deal to settle the 737 Max charges, a settlement that family members of crash victims are challenging. The plea deal included $1.77 billion in payments to airlines, $500 million for families and a $243.6 million criminal fine. But no Boeing employees were held personally responsible as part of the deal, and the government only brought charges against one person, Boeing 737 Max chief technical pilot Mark Forkner. A North Texas jury found Forkner not guilty of fraud charges.
The 737 Max crisis also instigated investigations by the Department of Transportation, Department of Justice and Congress into how Boeing was able to push a critical flaw past regulators at the Federal Aviation Administration.
Boeing eventually ousted several top executives, including CEO Dennis Muilenburg. The 737 Max was recertified in late 2020, and airlines such as Fort Worth-based American Airlines and Dallas-based Southwest brought it back early the next year.
