Federal Judge Rejects Boeing’s Plea Deal With DOJ

The Boeing logo is displayed at the company's factory in Renton, Wash., on Sept. 24, 2024. Lindsey Wasson/AP Photo

A federal judge has rejected a plea deal between Boeing and the Department of Justice (DOJ) as part of the department’s ongoing case over two fatal plane crashes.

In a Dec. 5 order, Texas Judge Reed O'Connor expressed concern about provisions related to compliance with diversity and anti-fraud efforts, as well as the court’s role in the deal.

“At this point, the public interest requires the Court to step in,” O'Connor’s order reads. “Marginalizing the Court in the selection and monitoring of the independent monitor as the plea agreement does undermines public confidence in Boeing’s probation, fails to promote respect for the law, and is therefore not in the public interest.”

More specifically, O'Connor criticized the deal for not conditioning Boeing’s probation on its compliance with anti-fraud recommendations from an independent monitor. He also noted that the deal says the monitor must report to the government, rather than to the court.

The victims’ families, O'Connor said, took issue with the government’s role.

“They argue, in essence, that the Government has monitored Boeing since the case was filed and yet failed to ensure Boeing’s compliance,” O'Connor wrote. “Because of this failure, they contend the monitor should be selected by and report to the Court to guarantee compliance.”

In August, the DOJ told the court that the agreement provided “a strong resolution that holds Boeing accountable, protects the American public, and provides the Families with all legally available remedies.”

The DOJ further stated that “the decision to have the Government select and oversee the Monitor is informed by the Fraud Section’s proven track record of effective oversight.”

Michael Stumo, who lost his daughter in the crash, said he is “very glad” that O'Connor rejected the deal.

“DOJ’s ‘coddling corporate criminals’ policy just got ... nailed,” he wrote in a post on social media.

O'Connor’s order requires the parties to confer and provide an update within 30 days on how they plan to proceed.

The DOJ said this summer that Boeing agreed to plead guilty to a criminal charge of defrauding the U.S. government. The company initially faced charges from the DOJ in 2021 but received a deferred prosecution agreement that was set to expire in 2024. The DOJ later said the company was in violation of that agreement after a Boeing 737 door panel blew off mid-air just days before the agreement’s scheduled expiration.

The agreement included a maximum fine of $487.2 million, along with the DOJ recommending the court credit $243.6 million that Boeing previously paid pursuant to the deferred prosecution agreement. It also said Boeing had agreed to pay lawful restitution owed to heirs and relatives of the crash victims.

O'Connor also raised concerns about the government’s commitment to diversity, equity, and inclusion (DEI), which the agreement said would be followed by Boeing. Citing one of President Joe Biden’s executive orders, he raised concerns that the government would employ race-based considerations in choosing an independent monitor.

“In a case of this magnitude, it is in the utmost interest of justice that the public is confident this monitor selection is done based solely on competency,” O'Connor said. “The parties’ DEI efforts only serve to undermine this confidence in the Government and Boeing’s ethics and anti-fraud efforts.”

O'Connor’s order came amid news that Boeing plans to lay off 2,500 workers and that the head of its DEI efforts has resigned. O'Connor’s order stated that after the court issued an order for supplemental briefing, Boeing removed DEI aspirations from its website.

“Policies like Boeing’s have been considered evidence of discrimination in Title VII cases,” O'Connor said, referring to a civil rights law banning employment discrimination.

Jacob Burg contributed to this report.