ALEXANDRIA, Va. (Legal Newsline) - The State of Rhode Island is taking Boeing to court over losses in its investment with the company caused by recent failures of its 737 MAX planes.
Boeing Company - along with its executives David L. Calhoun, Dennis A. Muilenburg, Brian J. West, and Gregory D. Smith - is facing a class action lawsuit filed by the State of Rhode Island Office of the General Treasurer on behalf of the Employees’ Retirement System of the State of Rhode Island.
The lawsuit alleges violations of federal securities laws and is brought on behalf of all entities that purchased or acquired Boeing common stock between October 23, 2019 and January 24, 2024.
The plaintiffs accuse Boeing of outsourcing the production and assembly of its airplane components to third-party suppliers to cut costs and production time, thereby compromising safety standards. This practice allegedly led to two fatal crashes involving Boeing's 737 MAX 8 planes due to design flaws in the flight control software.
The case also alleges that despite promising enhanced focus on safety following these disasters, Boeing failed to uphold adequate quality control standards. The company had previously entered into a deferred prosecution agreement with the U.S Department of Justice in January 2021 related to these incidents.
The case was filed in the United States District Court for the Eastern District of Virginia on January 30. Rhode Island has hired the private firms Cohen Milstein and Labaton Keller Sucharow for the case, with Cohen lawyer Steven Toll signing the complaint.