Boeing’s lawsuit risks soar around second 737 Max disaster

By Bob Van Voris and Janan Hanna / Bloomberg

Lawyers are already targeting Boeing for Sunday’s Ethiopian Airlines disaster even while investigators are still trying to figure out what caused two 737 Max 8 jetliners to go down in a span of five months, killing 346 people.

Boeing faces the prospect of substantial payouts to the families of passengers if it’s found responsible for both the Indonesia and Ethiopia crashes. But legal experts say the second one could prove even more damaging for the Chicago-based company. That’s because plaintiffs will argue the manufacturer was put on notice by the earlier tragedy that there was something dangerously wrong with its planes that should have been fixed.

The second crash “bolsters our claims that Boeing knew or should’ve known that the plane was defective and did nothing about it,” said Brian S. Kabateck, who represents the families of 12 victims of the Lion Air crash in October off the coast of Jakarta. “They should’ve issued a warning or notices and they didn’t. And as a result, all these people died.”

Another litigation headache for Boeing is the possibility that airlines may sue for the money they’ve lost by being forced to ground the 737 Max 8’s in their fleets, possibly through April or longer.

Peter Pedraza, a Boeing spokesman, declined to comment on the company’s potential legal liability in the two crashes. Boeing issued a statement this week saying it still has “full confidence” in the 737 Max models. Boeing Chief Executive Officer Dennis Muilenburg said the company was doing everything it could to understand the cause of the accidents, deploy safety enhancements and ensure that no more crashes happen.

Attorney Kevin Durkin, who specializes in plane crash cases, said that if Boeing knew of a defect in the 737 Max fleet before the crash, its potential liability would go up sharply — beyond just compensation for victims’ families for their losses.

“If you have a defective product and it turns out Boeing knew about it this could easily expose them to punitive damages,” said Durkin, a partner with the Chicago’s Clifford Law Offices who isn’t involved in the Lion Air litigation. “The standard is whether they acted with a ‘conscious indifference’ to the safety of others.”

Boeing is preparing fixes to anti-stall software that baffled pilots of the downed Lion Air jet by pitching the plane’s nose down dozens of times before it crashed in the Java Sea. The U.S. Federal Aviation Administration on Wednesday grounded 737 Max models after data showed suspicious parallels between the erratic, six-minute flight of the Ethiopian Airlines plane and the Lion Air flight.

“The circumstances of both Max 8 crashes suggest a possible design problem,” Mike Slack, an aviation lawyer with the Austin, Texas, firm Slack Davis Sanger said in an email Thursday. “We also know that from Lion Air and the subsequent Boeing emergency safety notice, that these Max 8s require more and different training than its predecessor, especially related to the plane’s Maneuvering Characteristics Augmentation System.”

Under an international treaty covering airlines’ liability for international air crashes, Ethiopian Airlines could try to limit its own liability to passengers by claiming that Boeing was 100 percent responsible for the crash.

Boeing could counter that the Max 8 planes were designed and manufactured with the latest technology and with due care, said Timothy Ravich, a professor of aviation law at University of Central Florida in Orlando. The company could claim there was no way of anticipating a crash.

That defense would obviously be complicated by the earlier Lion Air crash if it’s determined they were caused by similar design or manufacturing problems.

Or Boeing might try to spread the financial pain to other companies, if it determines that a defective component or contractor contributed to the disaster.

“Boeing could sue some suppliers,” Ravich said.

Because Boeing is based in Chicago, most of the lawsuits against it connected to the Ethiopian Airlines crash will probably be filed there, said Curtis Miner, a partner at the Miami law firm Colson Hicks Eidson. Dozens of suits over the Lion Air crash are already pending in Chicago federal court.

But that doesn’t mean the same set of liability laws will be applied to all the cases. A major part of the litigation will be over which countries’ laws apply, Miner said.

The families’ lawyers will seek to apply U.S. law, particularly the laws of plaintiff-friendly U.S. states. The best-case scenario for potential defendants, including Boeing, is for claims for passengers from Ethiopia and Kenya to be considered under the laws of those countries.

“The U.S. has the most expansive view of damages of any country in the world,” said Miner, whose firm represented families in the Lion Air crash.