On March 10, 2019, 157 people—including seven Americans—were killed when a defective Boeing 737 MAX 8 aircraft crashed in Ethiopia. This occurred less than five months after a similar 737 MAX 8 crash in Indonesia. There have been subsequent investigations and litigation against Boeing for their responsibility in the two crashes.
Now, the Securities and Exchange Commission (SEC) has imposed $201 million in fines against Boeing and its CEO for misleading investors about the safety of the planes involved. However, there is still a need for criminal investigations into Boeing CEOs Dennis Muilenburg and David Calhoun.
To be fully transparent, we want to acknowledge that we are attorneys representing families of the second crash’s victims. However, this represents an unusual instance where civil justice is insufficient. More needs to be done to adequately address the breadth and depth of the wrongs involved. At issue are the actions of Boeing and its CEOs. Their behavior reveals a deliberate pattern of covering up a dangerously flawed aircraft design, particularly after the first 737 MAX 8 crash on October 29, 2018 that killed all 189 persons on board.
After that crash, Boeing’s internal Safety Review Board quickly determined that the 737 MAX 8’s flight control system needed to be fixed. Boeing immediately began working on a revision to the control system—a major overhaul that was not described in available 737 MAX 8 flight or pilot training manuals.
The SEC has also determined that after the 2018 crash, Boeing CEO Dennis Muilenburg approved a Boeing press release saying that the 737 MAX 8 “is as safe as any airplane that has ever flown in the skies.” Muilenburg did so despite knowing of the Boeing Safety Review Board’s determination that the 737 MAX 8’s control system needed to be overhauled. In fact, the SEC found that Mr. Muilenburg suggested removal of the flight control redesign issue from the Boeing press release.
And the final press release failed to disclose the Boeing safety board’s determination of the need for a safety fix. Additionally, the SEC found that in January 2019—two months before the Ethiopian plane crash—Muilenburg was informed that Boeing had provided false information to the Federal Aviation Administration (FAA) regarding the safety of the 737 MAX 8. Despite this, Muilenburg’s subsequent public statements failed to disclose the falsity of this reporting to the FAA.
The SEC has now fined Muilenburg $1 million for his conduct. But that pales in comparison to the golden parachute Muilenburg received from Boeing when he was eventually fired—a total package worth an estimated $60 million. A million-dollar fine is not sufficient punishment. And although Muilenburg was succeeded by new Boeing CEO David Calhoun in 2020, serious issues exist regarding Mr. Calhoun as well. That’s because Mr. Calhoun served as Boeing’s Lead Director in the months after the first 737 MAX 8 crash.
Last year, a Delaware court found that Mr. Calhoun knowingly and publicly made false statements about Boeing’s Board of Directors. Calhoun claimed that Boeing’s board had met quickly after the Indonesian crash, had evaluated the plane’s safety risks, and recommended a grounding of the 737 MAX 8. However, the Delaware Court found that, while Calhoun knew this should have been done, these steps weren’t taken. Despite the court’s findings, Calhoun is still CEO of Boeing.
After the second 737 MAX 8 crash, the plane was grounded for 20 months while Boeing implemented an overhaul. That grounding cost Boeing billions of dollars—exactly what Muilenburg and Calhoun had tried to avoid. It’s a principle of American law that the crime of involuntary manslaughter occurs when death results from acts performed in a criminally negligent or reckless manner.
The public communications that Boeing made at Muilenburg’s and Calhoun’s insistence have now been recognized as false and misleading by both the relevant court and relevant regulator. These were statements that the U.S. government and the general public trusted regarding the 737 MAX 8’s safety. Muilenburg and Calhoun were also pivotal in Boeing’s decision to allow the unsafe 737 MAX 8 to keep flying after the first crash in 2018. This led directly to the second, fatal crash in Ethiopia.
Such irresponsible conduct—if proven in criminal court—needs to be punished, both for the memories of the deceased and for the safety of the general public. It’s time for the criminal justice system to look at the behavior of both Muilenburg and Calhoun.
Robert A. Clifford (left) and Shanin Specter (right) are attorneys concentrating in the representation of catastrophically injured persons. Mr. Clifford is a founding partner of Clifford Law Offices in Chicago. Mr. Specter is a founding partner of Kline & Specter in Philadelphia.