Background
On January 5, 2024, a Boeing 737 Max jet experienced a blowout of a mid-cabin panel shortly after takeoff. Following the incident, the Federal Aviation Administration (“FAA”) temporarily grounded all 737 Max jets for in-depth inspections. The FAA also investigated whether Boeing failed to ensure that its products conformed to its approved designs and FAA regulations.
The mandated inspections revealed loose bolts on door plugs in some Alaska Airlines and United Airlines 737 Max 9 jets. Subsequently, orders for Max 9 jets were delayed pending additional safety inspections. Additionally, the FAA barred Boeing from expanding production of Max 9 jets pending its formal investigation.
The Proposed Class Action
On January 30, 2024, shareholders filed a proposed class action in Virginia federal court against Boeing. The complaint alleged that Boeing, its President and CEO David Calhoun, former President and CEO Dennis Muilenburg, and Chief Financial Officer Brian West repeatedly made false and misleading statements about the integrity of the design, engineering, and certification process for the Boeing 737 Max line of jets.
More specifically, according to the plaintiffs, following the October 2018 and March 2019 crashes of two 737 Max jets, which resulted in the deaths of more than 300 people, Boeing assured its investors that it was focused on safety. However, as the plaintiffs argue, Boeing continually prioritized profit over safety, which resulted in the production of unsafe jets.
According to the complaint, following the January 5 accident, Boeing stock prices dropped by more than 18% and the company lost more than $28 billion of market value.
The Plaintiffs
The proposed class action, led by Rhode Island General Treasurer James Diossa on behalf of the Employees’ Retirement System of Rhode Island, covers Boeing Shareholders from October 23, 2019, to January 24, 2024, including New-York based retirement fund Local #817 IBT Pension Fund.
Employees’ Retirement System of Rhode Island is represented by Eric J. Belfi, Carol C. Villegas, and Francis P. McConville of Labaton, Keller, Sucharow, LLP, and Steven Toll and S. Douglas Bunch of Cohen, Milstein, Sellers, and Toll, PLLC.
Local #817 IBT Pension Fund is represented by Darren J. Robbins, Danielle S. Myers, Michael Albert, and Kenneth P. Dolitsky of Robbins, Geller, Rudman, & Dowd, LLP, and Craig C. Reilly of the Office of Craig C. Reilly.
On April 2, 2024, Labaton, Keller, Sucharow, LLP, and Robbins, Geller, Rudman, & Dowd, LLP, filed motions to be the lead plaintiff in the proposed class action lawsuit.
