Boeing Likely to Face Legal Troubles Over 737 Max 8
Boeing faces lawsuits from passengers, particularly since eight of them on the Ethiopian Air flight were Americans. But airlines also could bring legal actions over revenue losses incurred due to the grounding, according to lawyers who specialize in aviation.
March 13, 2019 at 06:08 PM
4 minute read
The original version of this story was published on Law.com
Boeing's legal troubles could soar following decisions by several countries, including the United States, to ground its newest model of commercial aircraft following a March 10 crash in Ethiopia that killed 157 people.
On Wednesday, the Federal Aviation Administration issued an emergency order temporarily grounding the entire 737 Max series of aircraft in the United States. The circumstances of the Ethiopian Air flight's crash bore resemblances to that of another 737 Max 8 aircraft owned by Lion Air that crashed Oct. 29, killing 189 people—although the cause of both crashes remains unknown.
Boeing faces lawsuits from passengers, particularly since eight of them on the Ethiopian Air flight were Americans. But airlines also could bring legal actions over revenue losses incurred due to the grounding, according to lawyers who specialize in aviation. On Wednesday, Norwegian Air CEO Bjørn Kjos told customers that the airline would seek compensation from Boeing.
“This will be a large financial loss,” said Pete Flowers, of Chicago's Meyers & Flowers, who has filed a lawsuit against Boeing on behalf of a Lion Air passenger's family and plans to sue over the Ethiopian Air crash in the coming days. “The claims against Boeing are going to be enormous overall. There's going to be a lot at stake here.”
Boeing spokesman Paul Bergman said in a statement: “Boeing extends our heartfelt condolences and sympathies to the families and loved ones of those onboard Lion Air Flight 610 and Ethiopian Airlines Flight 302. As the investigation continues, Boeing is cooperating fully with the investigating authorities. We won't comment on lawsuits directly.”
The FAA's move comes after regulators in 22 countries, including China, Canada and the entire European Union, had grounded their 737 Max 8 fleets earlier this week. The grounding of flights would have a “significant impact” on airlines, such as American Airlines and Southwest Airlines, said Mark Dombroff of LeClairRyan in Alexandria, Virginia, who represents airlines.
“The insurers, Boeing, everyone, is reading insurance policies, warranties,” he said. “Everyone is reading everything now because all of a sudden an entire fleet worldwide has been grounded. All airlines operating this airplane are, or were, impacted to a greater or lesser degree, either canceling flights or covering flights. These airlines are high-usage pieces of equipment. They're flying them seven days a week.”
He doubted the airlines would drag Boeing into court, given their business relationship with the manufacturer. Instead, they would review their warranties with Boeing, which are “tightly drawn,” or make claims for grounding insurance, which applies when the government grounds planes.
“They could have potentially significant damages,” he said of the airlines.
Boeing already faces lawsuits on behalf of dozens of passengers of the Lion Air flight, none of whom were Americans. A suit filed in King County Superior Court in Seattle names relatives of 17 passengers, but most of the cases are in Illinois, where Boeing, represented by Perkins Coie partner Bates Larson, has removed some from Cook County Circuit Court to the Northern District of Illinois. Boeing also has sought to limit discovery in the Lion Air cases to forum non conveniens, which it plans to argue in moving to dismiss.
But the Ethiopian Air crash could thwart those plans, Flowers said.
“It's a clear sign that there's a definite problem with this particular aircraft,” he said. “It may expand the discovery that we end up doing because of the similarities between the two crashes.”
Those similarities indicate the same alleged product defect—in particular, the Maneuvering Characteristics Augmentation System, or MCAS, an automated safety mechanism designed to prevent stalling that may, under certain circumstances, push the aircraft into a nosedive. Boeing has made plans to complete a software upgrade to the aircraft by April, but Charles Herrmann, of Herrmann Law Group in Seattle, who filed the King County lawsuit over the Lion Air crash, emphasized that the negligence claims are two-fold: the defect itself, and the failure of Boeing to inform pilots about it in training manuals. That left the Lion Air pilots “fighting a ghost,” he said.
The same might be true of the Ethiopian Air pilots, he said.
“Both encounter problems immediately, both dip, and actually descend for a period of time, before rising,” he said. “Both pilots requested permission to return to base for identical reasons, which was a flight control problem. There are some remarkable similarities that certainly raise questions.”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllWhy Litigation Demand Might Break Firms’ Boom-and-Bust Cycle
A Look Back at 'Goldman Sachs': How Price Impact Is Changing Securities Class Actions
5 minute readBeyond Borders: Baker McKenzie Attorneys Stress the Need for a Global Outlook Cybersecurity and Data Privacy Matters
Trending Stories
- 1So You Want to be a Tech Lawyer? Consider Product Counseling
- 2US District Judge in North Carolina Will Take Senior Status
- 3From 'Confusing Labyrinth' to Speeding 'Roller Coaster': Uncertainty Reigns in Title IX as Litigators Await Second Trump Admin
- 4Critical Mass With Law.com’s Amanda Bronstad: Why Jurors in California Failed to Reach Verdict Over Zantac, Bankruptcy Judge Tables Sanctions Against Beasley Allen Attorney
- 5Jones Day Client Seeks Indemnification for $7.2M Privacy Settlement, Plus Defense Costs
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250