Boeing shareholders sue after midair 737 Max 9 blowout

Shareholders are suing Boeing over allegations the company misled them about potential “serious safety lapses,” according to court filings. 

The lawsuit, filed Tuesday in the U.S. District for the Eastern District of Virginia, marks the latest legal action taken against Boeing following last month’s midair blowout in which a door plug on a Boeing 737 Max 9 blew off while an Alaska Airlines flight was 16,000 feet above Oregon. 

The securities class action suit was spearheaded by Rhode Island Attorney General James Diossa, who argued the manufacturer “betrayed the trust of Rhode Island pensioners” and is calling on Boeing to be held accountable for their alleged actions. The suit was filed on behalf of all persons and entities who purchased common stock in the company between Oct. 23, 2019, and Jan. 24, 2024. 

According to the complaint, the October 2019 start date is when Boeing and its executives claimed they were “making steady progress” on their “top priority … the safe return to service of the 737 MAX” following two deadly crashes in late 2018.

“Unbeknownst to investors, statements such as those above were false and misleading because Boeing failed to disclose that it had been prioritizing its profits over safety, which led to poor quality control standards in the production of its commercial aircrafts such as the 737 MAX” that prompted a “heightened risk” of manufacturing flaws, the suit stated. 

“It took a near disaster to expose this heightened safety risk,” the complaint reads.

Pointing to the subsequent decline in the market value of Boeing’s stock after the blowout — which prompted the Federal Aviation Administration to ground the entire 737 Max 9 fleet in the U.S., 171 aircraft — the suit contended the plaintiffs “suffered significant losses and damages under the federal securities laws.” 

The Jan. 5 blowout left a gaping hole on the side of the plane, forcing pilots to make an emergency landing at Portland International Airport instead of continuing to its Ontario, Calif., destination. 

Boeing is already facing lawsuits from two separate groups of passengers who were on the plane. In one case, a group of six passengers filed a class-action suit against the company over allegations the emergency caused some to suffer physical and emotional “distress.” 

In another case against both Boeing and Alaska Airlines, four passengers are seeking damages and argued they experienced “havoc, fear, trauma [and] severe and extreme distress” aboard the flight. 

No serious injuries were reported on the flight, but the incident sparked widespread calls for an in-depth investigation into Boeing, Alaska Airlines and Spirit AeroSystems, which makes the fuselage, and the door plug that blew off.

The FAA launched a probe into Boeing shortly after the blowout into whether the manufacturer failed to ensure its planes complied with the agency’s safety regulations, in additional to an audit of the 737 Max 9 production line and suppliers. 

The agency approved a “thorough inspection and maintenance process” to be performed on each of the 171 grounded 737 Max 9 aircrafts last month.

The process included looking at each of the “specific bolts, guide tracks and fittings,” along with the left and right midcabin exit door plugs and other parts. It will also includes retorquing fasteners and correcting any damage or abnormal conditions, the FAA said. 

The process for some of the aircraft was completed last week, and Alaska Airlines began flying the jetliners once again over the weekend, following the probe.

Ben Minicucci, Alaska’s CEO, revealed last month the airline’s in-house inspections of the 737 Max 9 aircraft found “some loose bolts on many” of the aircraft.

Boeing told The Hill Thursday that it does not have further comment on the suit.