Boeing Investors Gain Class Status in 737 MAX Safety Suit (1)

Boeing Co. investors can proceed as a class in their suit alleging the company and its former chief executive officer misled them about the safety of its 737 MAX airplanes in the wake of two deadly crashes that killed 346 people, a federal judge ruled.

Judge Franklin U. Valderrama certified a class of those who acquired Boeing stock, or bought call options or sold put options, from Nov. 7, 2018, through Oct. 18, 2019, Monday. The event study conducted by the investors’ expert with an out-of-pocket damages methodology was sufficient to measure stock price inflation from alleged misrepresentations, the US District Court for the Northern District of Illinois judge said.

The investors had sought certification of a class extending into December 2019, when Boeing said it was pausing production on the troubled 737 MAX, which drew safety concerns after the 2018 crash of a Lion Air jet and an Ethiopian Airlines crash the following year.

But Boeing and ex-CEO Dennis Muilenburg successfully argued that the alleged misrepresentations would not have impacted the stock price then, as the market had already received information that the 737 MAX wasn’t returning to service in 2019, and there weren’t big stock drops tied to statements that November and December, Valderrama said.

The judge allowed the case to move forward in 2024 ruling rejecting a defense motion to dismiss. The investors adequately alleged Boeing and Muilenburg knowingly or recklessly made material misstatements related to the 737 MAX’s safety after the crashes, Valderrama said then, letting some securities fraud claims proceed. This was in part because the investors alleged Muilenburg knew of messages involving 737 Chief Technical Pilot Mark Forkner about important safety information tied to an automated system not being shared with regulators during the aircraft model’s certification process.

The New York Times on October 18, 2019, published a story about safety issues including certain of Forkner’s text messages. Boeing’s stock price fell 6.8%, or by about $25 a share, that day.

The planemaker’s faced a slew of lawsuits and settled cases tied to the two crashes. Boeing avoided a US criminal conspiracy charge over them last year, with a Texas federal judge making way for a $1.1 billion settlement after approving the US Justice Department’s request to drop the case.

Boeing is challenging investor class certification in another lawsuit filed after a 737 MAX 9 door panel blew out on an Alaska Airlines flight in 2024. The US Court of Appeals for the Fourth Circuit is scheduled to hear oral arguments in that dispute, which centers around the adequacy of the damages methodology, in May.

Bernstein Litowitz Berger & Grossmann LLP was appointed class counsel for the investors in the Illinois federal court. Kirkland & Ellis LLP represents Boeing and Muilenburg. Neither of these law firms nor Boeing immediately responded to emails seeking comment.

The case is In re Boeing Co. Aircraft Sec. Litig., N.D. Ill., No. 19-cv-02394, 3/16/26.