US judge sets quick schedule to consider family objections to Boeing plea deal

By David Shepardson

WASHINGTON (Reuters) - A U.S. judge on Monday set a fast schedule to consider the objections of relatives of those killed in two fatal 737 MAX crashes to the Justice Department's plea deal with Boeing.

The planemaker on July 7 agreed in principle to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million. U.S. District Judge Reed O'Connor in Texas said after the Justice Department files the plea agreement, relatives of those killed will have a week to file objections and then the government and Boeing will have two weeks to respond. The families will then have five days to file a response.

The deal is a "slap on the wrist," Erin Applebaum, a lawyer at Kreindler & Kreindler LLP who represents some of the victims' relatives, said last week.

Boeing plans to plead guilty to conspiring to defraud the Federal Aviation Administration after the government said the planemaker knowingly made false representations about key software for the 737 MAX. The Justice Department said in May the planemaker had breached a 2021 deferred prosecution agreement.

O'Connor previously criticized Boeing, saying in 2023: "Boeing’s crime may properly be considered the deadliest corporate crime in U.S. history."

Boeing 737 MAX crashes in Indonesia and Ethiopia in 2018 and 2019 killed a total of 346 people and led to a 20-month grounding of the best-selling plane.

The Justice Department said last week it hoped to file the plea agreement by July 19 but said it may need a few additional days. The department will file a factual statement supporting the government's breach determination.

As part of the deal, Boeing agreed to spend at least $455 million over the next three years to boost safety and compliance programs. Boeing's board will meet with relatives of those killed in the MAX crashes.

The deal also imposes an independent monitor, who will have to publicly file annual progress reports, to oversee the firm's compliance. Boeing will be on probation during the monitor's three-year term.

The Justice Department will file in the coming days a document detailing "the respective terms of Boeing’s compliance obligations and the independent compliance monitor."

A panel blew off a new Boeing 737 MAX 9 jet during a Jan. 5 Alaska Airlines flight, just two days before the 2021 deferred agreement that had shielded the company from prosecution over the 2018 and 2019 crashes expired. Boeing faces a separate ongoing criminal probe into the Alaska Airlines incident, which did not result in any serious injuries.

(Reporting by David Shepardson in Washington; Editing by Franklin Paul and Matthew Lewis)