US judge to hear objections to deal that allows Boeing to avoid prosecution over crashes

By David Shepardson

FORT WORTH, Texas (Reuters) -A U.S. judge on Wednesday will hold a hearing on whether to approve a deal between the Justice Department and Boeing that allows the planemaker to avoid prosecution on a charge stemming from two fatal 737 MAX plane crashes that killed 346 people.

Judge Reed O'Connor in Texas will consider objections from relatives of some of those killed in the crashes in Indonesia in 2018 and Ethiopia in 2019 to the agreement that enables Boeing to escape oversight from an independent monitor for three years.

Boeing last year agreed to plead guilty under a deal with prosecutors to a criminal fraud charge that it misled U.S. regulators about a crucial flight control system on the 737 MAX, its best-selling jet, but the company later reversed course.

Boeing agreed to the initial plea deal during the final months of the Biden administration.

O'Connor rejected the agreement in December, faulting a diversity and inclusion provision in the deal related to the selection of an independent monitor.

That prolonged the case into the Trump administration, which took over on January 20 and overhauled the Justice Department, leading to a tentative non-prosecution agreement.

Some family members argue dismissal of the charge is not in the public interest, citing O'Connor's statement in 2023 that "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history."

Paul Cassell, a lawyer for some of the relatives, said the "misleading and unfair deal is clearly against the public interest. The families will be asking Judge O’Connor to use his recognized authority to reject this inappropriate deal."

Boeing says the executive branch solely has the power to decide whether to bring or maintain a prosecution. The planemaker has asked O'Connor to reject objections filed by families and to grant the government's motion to dismiss the criminal charge.

Under the non-prosecution agreement, Boeing agreed to pay an additional $444.5 million into a crash victims' fund to be divided evenly per victim of the two fatal 737 MAX crashes, on top of a new $243.6 million fine.

Under the non-prosecution agreement, Boeing will pay $1.1 billion in total, including the fine, compensation to families and more than $455 million to strengthen the company’s compliance, safety and quality programs.

The vast majority of the families have settled civil suits with Boeing and collectively have been "paid several billion dollars," the Justice Department said.

Boeing has faced enhanced scrutiny from the Federal Aviation Administration since January 2024, when a new MAX 9 missing four key bolts suffered a mid-air emergency, losing a door plug. As a result, Justice Department officials decided to reopen the older fatal crashes case and to negotiate a plea agreement with Boeing.

(Reporting by David Shepardson; Editing by Jamie Freed)