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Boeing has agreed to plead guilty to conspiring to defraud safety regulators regarding the 737 Max 8's development, thus avoiding a criminal trial over two deadly crashes in 2018 and 2019. This development was disclosed in a U.S. Department of Justice (DOJ) court filing late Sunday.

Boeing DOJ 737 Max Deal: Details of the Plea Agreement

The DOJ informed U.S. District Judge Reed O'Connor in Fort Worth, Texas, about an agreement in principle on a plea deal with Boeing. Under this deal, Boeing will pay an additional $243.6 million criminal fine, invest at least $455 million to enhance its compliance and safety programs, and be subject to a three-year independent compliance monitor. This plea deal stems from a January 2021 deferred prosecution agreement (DPA), and Boeing will not face any other criminal charges related to the conduct described in the DPA. However, the DOJ noted that this agreement does not provide immunity for any other potential government investigations into Boeing.

Background of the Deferred Prosecution Agreement

The 2021 DPA was intended to conclude the DOJ's investigation into allegations that Boeing employees downplayed the 737 Max 8's new features to persuade the Federal Aviation Administration (FAA) to require less-rigorous training for pilots, thereby expediting the aircraft's market entry. The DOJ told Judge O'Connor in May that Boeing breached its obligations under the DPA by failing to establish an effective compliance and ethics program to prevent and detect fraud.

Under the initial DPA, Boeing agreed to a $243.6 million criminal penalty, $1.77 billion in compensation to its airline customers, and $500 million for a crash victims' fund to compensate families of the 346 people killed in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 crashes. The 737 Max 8 jets were globally grounded from March 2019 to late 2020 following these accidents.

Boeing DOJ 737 Max Deal: Investigation and Safety Concerns

The 737 Max 8 jets were equipped with the Maneuvering Characteristics Augmentation System (MCAS), which was found to be vulnerable to faulty sensor readings that could inadvertently trigger the system, causing the plane to nosedive. Investigations revealed these vulnerabilities, prompting widespread safety concerns.

A Boeing spokesperson confirmed the agreement in principle with the DOJ and referred inquiries to the Justice Department for further details.

Legal and Public Response

The end of the DPA's term earlier this year initiated a six-month evaluation period, during which the government could seek a Rule 48 dismissal of the conspiracy charge if Boeing complied with the agreement or pursue criminal prosecution. This period coincided with mounting pressure from families of the 737 Max 8 crash victims and a recent incident involving a 737 Max 9 jet.

Boeing's DPA faced intense scrutiny, particularly from families of the Lion Air and Ethiopian Airlines crashes, who challenged the agreement in court. They petitioned the Fifth Circuit to mandate DOJ consultations with the families and to rework Boeing's DPA to eliminate provisions shielding Boeing from criminal prosecution. However, the Fifth Circuit denied this request in December.

Boeing DOJ 737 Max Deal: Victims' Families' Reaction

Judge O'Connor previously ruled that the victims' families were crime victims under the Crime Victims' Rights Act, and that the DOJ had violated the statute by not consulting them before finalizing Boeing's DPA. Despite this, the judge did not grant the families' demands for stricter conditions, leading to their appeal.

Erin Applebaum, a partner at Kreindler & Kreindler LLP, which represents 34 families of Ethiopian Airlines Flight 302 victims, expressed disappointment with the plea deal, describing it as inadequate and a "slap on the wrist." She criticized the DOJ for not acknowledging Boeing's criminal conspiracy and for its refusal to enforce meaningful changes within the company.

Boeing DOJ 737 Max Deal: Boeing's Stance

Boeing has consistently maintained that it complied with the DPA. The company expressed deep regret for the accidents and sympathy for the victims' families, but argued there are no legal grounds for a court to challenge the DOJ's prosecutorial discretion.

Legal Representation

The families are represented by several law firms, including Kreindler & Kreindler LLP and Clifford Law Offices PC. The federal government is represented by Lorinda Laryea of the DOJ's Fraud Section and Chad E. Meacham of the U.S. Attorney's Office for the Northern District of Texas. Boeing is represented by Kirkland & Ellis LLP and McGuireWoods LLP.