SCOTUS rejects Boeing Appeal regarding MAX suit |

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The Supreme Court of the United States (SCOTUS) will not hear a case brought by Boeing in a dispute between Southwest Airlines Pilots Association related to inadequate training for the 737 MAX. The lawsuit alleges that Boeing interfered with the union’s business association with Southwest and fraudulently induced the pilots to agree to fly the MAX.

The Boeing 737 MAX experienced two fatal crashes in 2018 and 2019, resulting in a 20-month grounding of the aircraft. The crashes were determined to have been caused by the faulty MCAS system, and Boeing purposely misled the FAA during the aircraft certification process. Those oversights also impacted pilot training. The union is seeing damages for reduced flying hours, lost wages, and lost union payments.

The court’s jurisdiction became a key issue in appeals by both parties. The Texas Fifth District Court of Appeals reversed the dismissal of the lawsuit, citing that a Federal statute under the Railway Labor Act could apply only to signatories of the agreement. Since Boeing was not a signatory, it had no standing under the federal law to dismiss the case. Apparently, SCOTUS agreed with that interpretation as it did not grant certiorari.

The net result is that the Southwest Airlines Pilots Association can continue its 2019 lawsuit against Boeing in the Texas appellate courts. This lawsuit will be heard under the jurisdiction of Texas, rather than the federal courts, a favorable ruling for SWAPA.

The Bottom Line

Boeing’s legal liability from the MAX crashes has not yet been fully played out. This case, from Southwest pilots, outlines the loss of revenue and union dues from the fatal crashes and grounding. A complicating factor for the case is the global pandemic, which shut down much of the industry in 2020, as it is likely that the aircraft would have been grounded to the same degree as other aircraft during the COVID crisis. But that is something the lawyers can and will argue if this case hits trial.

With a path to trial now cleared, we expect the parties to reach an agreement at the 11th hour, just before trial. While this would likely cost Boeing some money, it may not be as rich as SWAPA would like. Stay tuned, as this case is not over yet.