A U.S. judge on Thursday rejected Boeing's agreement to plead guilty to fraud in the wake of two fatal 737 MAX crashes, faulting a diversity and inclusion provision in the deal.
Boeing did not immediately comment. The U.S. Department of Justice, which brokered the plea bargain with Boeing, is reviewing the opinion, a spokesperson said. Boeing and the DOJ's options could include appealing the judge's rejection of the plea deal or presenting a renegotiated agreement for court approval.
U.S. District Judge Reed O'Connor in Fort Worth, Texas, seized on a single sentence in the plea agreement mentioning the DOJ's diversity policy regarding the selection of an independent monitor to audit the plane maker's compliance practices.
Boeing and the DOJ now have 30 days to update the court on how they plan to proceed in the case, O'Connor ruled.
Judges weighing plea deals typically do not upend them over issues that the parties to the agreement have not disputed. In the rare cases that they do, it is usually because the judge wants to impose a different punishment than prosecutors have agreed to.
The plea bargain also marginalizes the judge in the selection and oversight of the independent monitor, and it forbids imposing a probation condition requiring Boeing to comply with the monitor's anti-fraud recommendations, O'Connor said in his decision. He said the agreement was "not in the public interest."
Relatives of the victims of the two 737 MAX crashes, which occurred in 2018 and 2019 and killed 346 people, have called the plea agreement a "sweetheart" deal that failed to adequately hold Boeing accountable for the deaths of their loved ones.
The two plane crashes occurred in Indonesia and Ethiopia over a five-month period. The families had briefly referenced the DOJ diversity and inclusion policy in court filings opposing the plea agreement, but did not detail concerns about it.
"Judge O’Connor has recognized that this was a cozy deal between" the government and Boeing "that failed to focus on the overriding concerns: holding Boeing accountable for its deadly crime and ensuring that nothing like this happens again in the future," said Paul Cassell, a lawyer representing the families.
Cassell said he hoped the decision would result in the agreement being renegotiated to specifically address the passengers and crew who perished in the plane crashes.
An accepted plea deal would have branded Boeing a convicted felon for conspiring to defraud the U.S. Federal Aviation Administration about problematic software affecting the flight control systems in the planes that crashed.
Boeing had agreed to pay a fine of up to $487.2 million and spend $455 million to improve safety and compliance practices over three years of court-supervised probation as part of the deal.
Victims' relatives want Boeing and its executives charged with crimes holding them responsible for the deaths of their loved ones and any evidence of wrongdoing presented in a public trial. They have also argued Boeing should have to pay up to $24.78 billion in connection with the crashes.
