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Boeing Agrees to Talk Settlement Over 737 Max 8 Crash Lawsuits

Boeing and lawyers suing on behalf of victims of last year’s Lion Air crash have agreed to a mediation in July in an attempt to settle the cases.

By Amanda Bronstad | May 29, 2019 at 07:35 PM

Debris recovered from the crash site sits on the dockside at Tanjung Priok Port in Jakarta, Indonesia, on Oct. 29, 2018. Photo: Rony Zakaria/Bloomberg

The Boeing Co. has agreed to mediate dozens of lawsuits brought over last year’s Lion Air crash, one of two disasters tied to its grounded 737 Max 8 aircraft.
Lawyers for Boeing and family members suing on behalf of victims of the Oct. 29 crash of Lion Air Flight 610 in Indonesia, which killed 189 people, told a federal judge in Chicago about the mediation plan in a joint case management report filed in court this month. Boeing had agreed to bring in mediator Donald O’Connell, a retired judge of the Cook County Circuit Court in Illinois, to “negotiate now in good faith to settle these cases,” the report said.
The move appears to be a turnaround in legal strategy from last month, when Boeing CEO Dennis Muilenburg attempted to assure shareholders about the safety of its aircraft while skirting calls for his resignation. Discussion about mediation talks come after Boeing and a “group of counsel designated to represent the interests of various plaintiffs” had a telephone conference May 10, according to the case management report.
“During the call, Boeing made clear its willingness to negotiate now in good faith to settle these cases for full compensatory damages under the applicable law as assessed based on the facts and circumstances of each case,” lawyers wrote in the report. “To that end, Boeing proposed that the parties now engage in damages discovery followed by settlement discussions and mediation.”
On May 20, U.S. District Judge Thomas Durkin of the Northern District of Illinois ordered that mediation talks, anticipated to last several days, begin July 17.
“Boeing and the claimants in the Lion Air Flight 610 cases have agreed to work together to explore early settlement of these claims, so that those affected can receive compensation without the need for prolonged litigation,” said Paul Bergman, a spokesman for Boeing, which is represented by Mack Shultz, of Perkins Coie in Seattle.
Brian Kabateck, who has filed three lawsuits against Boeing on behalf of Lion Air victims, said the discussions “came about quickly.”
“It’s really a big question right now of whether or not there’s real efforts to mediate or not,” said Kabateck, of Kabateck LLP in Los Angeles. “We’re keeping an open mind and we’re hoping that Boeing is keeping an open mind as well.”
Another lead plaintiffs attorney with several Lion Air cases, Steven Marks of Podhurst Orseck in Miami, said plaintiffs’ attorneys had pushed for an expedited schedule on the mediation. He said there is a “reasonable likelihood” that settlement talks would be successful.
The mediation talks do not involve lawsuits brought over the Ethiopian Airlines 302 crash March 10 that killed 157 people. That crash, coupled with the Lion Air disaster, prompted Boeing to ground its 737 Max 8 aircraft.
But Marks said he wouldn’t be surprised if Boeing reached out to lawyers in those cases, as well.
“It’s fairly obvious that the liability in this case is aggravated and gross, and they’re getting hurt publicity wise, and the fleet is still grounded, and I think any reasonable fact finder is going to hold Boeing accountable,” he said. “As a corporation that wants to put something behind them, it’s the logical thing to do.”
This week, the International Air Transport Association, an airline industry group, said Boeing’s 737 Max 8 would remain grounded for several more months. Earlier this month, Boeing named a new general counsel.
The mediation talks halt Boeing’s plan to file a motion to dismiss the Lion Air lawsuits next month. Boeing had indicated it would assert dismissal based on forum non conveniens. If the lawyers “reach an impasse” during mediation, according to the joint case management report, Boeing would have 10 days to file its motion to dismiss.
Marks said doubted Boeing’s dismissal arguments would fly.
“For a lot of reasons, these cases will not be dismissed on forum non conveniens,” he said. “There are a number of shareholder suits pending, a criminal investigation pending, and all the issues related to liability are in the United States. The FAA is not subject to forum non conveniens dismissal, and they’re going to be joined in the case, and the same facts are intermixed and duplicative to the claims against Boeing.”
Durkin scheduled a June 30 deadline for plaintiffs attorneys to produce damages discovery.
“It’s anyone’s bet what could happen.” Kabateck said. “We could be at law and motion practice by the end of summer. We could be in settlement discussions at the end of the summer. This is a story that is unlike anything I’ve ever been involved in my legal career.”7