FORT WORTH, Texas — Boeing pleaded not guilty Thursday to a fraud charge in an unusual case in which families of passengers who died in two plane crashes are trying to throw out a settlement the company reached to avoid prosecution.
At a hearing dominated by emotional, wrenching testimony from passengers’ relatives, a federal district judge took the plea and ordered Boeing not to break any laws for the next year.
The judge delayed ruling on a request by the families to appoint a special monitor to examine safety issues at the aerospace giant. Boeing and the Justice Department opposed the request.
More than a dozen relatives of passengers on a Boeing 737 Max that crashed in 2019 in Ethiopia — less than five months after a Max crashed in Indonesia — held nothing back as they testified about their loss.
Boeing’s chief aerospace safety officer and lawyers for the company and the Justice Department sat just feet away but showed no reaction to any of the stories.
The Justice Department investigated Boeing after the second Max crash and settled the case in January 2021. With the settlement, the government agreed not to prosecute Boeing on a charge of defrauding the United States by deceiving regulators who approved the plane. In exchange, the company paid $2.5 billion, including a $243.6 million fine.
The families are still stunned.
“We want to see real justice, and that has to be prosecutions for manslaughter,” said Naoise Connolly Ryan, whose husband was on the second Max that crashed.
Naheed Noormohamed, who lost his father on the same flight, said the Justice Department had failed the families by not considering their pain.
“This is not just a failure of justice, it’s a failure of humanity,” he testified.
The fate of the settlement could rest with Judge Reed O’Connor. He carved a path for the families to challenge the settlement by ruling last November that the Justice Department had violated federal law by not consulting with crime victims before what amounted to a plea deal.
The families have asked O’Connor to throw out part of the settlement that gave Boeing immunity from prosecution. They want that so they can lobby the Justice Department to throw out the deal and prosecute the company. The judge has not ruled on that request.
The families also asked the judge to impose conditions on Boeing much as he might on any criminal defendant during an arraignment.
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Boeing and the Justice Department joined ranks to oppose two of the proposed conditions: the special monitor, and the appointment of three passenger advocates who would make a public report about the company.
The company, which is based in Arlington, Virginia, and government lawyers said such steps were unnecessary because Boeing has been following the terms of the settlement, called a deferred prosecution agreement, for two years.
Mark Filip, a lawyer for Boeing, said the government’s supervision of the agreement is “robust” and is working. Another Boeing attorney, Benjamin Hatch, said representatives from the company and the Justice Department meet least monthly: “It’s very real oversight.”
Boeing has faced civil lawsuits, congressional investigations and massive damage to its business since the crashes in 2018 and 2019, which killed a combined total of 346 people.
The first Max passenger flight was in 2017. The first crash occurred in October 2018 in Indonesia and was followed by another in March 2019 in Ethiopia.
Before both crashes, an automated flight-control system that Boeing did not initially disclose to airlines and pilots pushed the nose down based on a faulty sensor reading. Boeing blamed two former employees for misleading the Federal Aviation Administration about the system, known by its acronym, MCAS.
One of those former employees, a test pilot, is the only person prosecuted in connection with the Max. A jury in O’Connor’s courtroom found him not guilty last year.