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Monday, August 19, 2019

Southwest accused of racketeering in lawsuit over safety of Boeing's 737 MAX planes

Federal Court

By Carrie Bradon | Jul 18, 2019

SHERMAN, Texas (Legal Newsline) – A group of people who purchased airline tickets for flights on now-grounded 737 MAX series planes manufactured by Boeing alleges that the airplane manufacturer and Southwest Airlines lied to customers about the defective nature of the planes.

Damonie Earl, Linda Rugg, Alesa Beck, Timothy Blakey Jr. and others, individually and on behalf of all others similarly situated, filed a complaint on July 11 in the U.S. District Court for the Eastern District of Texas against The Boeing Co. and Southwest Airlines Co. alleging violation of the Racketeer Influenced and Corrupt Organization Act and other counts.

The suit states the plaintiffs all purchased tickets for Southwest Airlines or American Airlines for flights on 737 MAX series planes before they were grounded by the Federal Aviation Administration on March 13. They allege the prices of the tickets for flights on MAX planes were significantly higher than their actual value because of the alleged misrepresentations of the defendants.

The plaintiffs allege that Southwest obtained profits through a "collusive" relationship with Boeing. The plaintiffs allege the defendants worked together by lying to customers, regulators, pilots and employees about the safety of Boeing's 737 MAX 8 aircraft, which the plaintiffs allege were fraught with defects. 

The suit states Southwest would economically backstop Boeing and be given early access to new 737 models and the lowest price on all 737 aircraft, allowing Southwest to reduce costs.

"It took government intervention — the grounding of the entire fleet of 737 MAX 8 airplanes by the Federal Aviation Administration — for Southwest to publicly acknowledge a problem," the suit states. "But in reality, Southwest knew the 737 MAX 8 was fatally flawed and had worked with Boeing to cover it up and falsely tout the safety of the airplane."

The suit states the 737 MAX 8 planes were involved in the crashes of Lion Air Flight 610 in October 2018 and Ethiopian Airlines Flight 302 in March.

The plaintiffs are seeking actual, compensatory, statutory and consequential damages, punitive and treble damages; restitution, disgorgement of ill-gotten gains, attorneys' fees, expert fees, interest and a trial by jury. The plaintiffs are represented by David L. Hecht, Andrew Lorin, Michael M. Pomerantz, Barron M. Flood and Yavar Bathaee of Pierce Bainbridge Beck Price & Hecht LLP in New York City and Brian J. Dunne of Pierce Bainbridge Beck Price & Hecht LLP in Los Angeles.

U.S. District Court for the Eastern District of Texas case number 19-CV-00507

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Southwest Airlines Co. HQ The Boeing Company

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